Mining giant Rio Tinto has announced plans to invest a further $816 million in the company’s Pilbara iron ore project. The spending will be directed toward the company’s integrated power and gas network.

 

The spending will be used to support the annual production capacity targets of 283 million tonnes of iron ore, a milestone the company has targeted for 2013.

 

“This investment marks yet another significant step towards the expansion of iron ore production by 50 per cent in the five years to 2015, a timeline we recently brought forward by six months. These projects provide certainty in meeting our power and fuel supply requirements, both now and into the future,” Sam Walsh, chief executive Iron Ore and Australia said.

 

$509 million will be spent on the upgrading of the integrated power and gas network which will deliver an additional 120MW to sustain the current capacity of 230 million tonnes as well as supporting the expansion to the 283 million tonne target.

 

Two 40MW open-cycle gas turbines will be installed as part of a new power station near the West Angelas mine site and a 40MW open-cycle gas turbine will be built at the existing Yurralyi Maya Power Station near Dampier.

 

The company will also spend $306 million in fuel infrastructure to support the expansion programme to 283 Mt/a, and provide some of the capacity needed for expansion to 333 Mt/a.

 

On completion, the fuel network will have a total storage capacity of 100ML, with 56ML additional capacity at Parker Point port terminal at Dampier. Two new inland distribution hubs will also be created, removing the requirement for two trains to transport fuel from Port Hedland, some 400 kilometres to the north. 

 

Rio Tinto's schedule for expanding its integrated Pilbara operations is as follows:

  • 225 Mt/a - current operating capacity
  • 230 Mt/a by end of Q1 2012 - Dampier port incremental (in implementation)
  • 283 Mt/a by end of H2 2013 - Cape Lambert 53 Mt/a increment (in implementation)
  • 333 Mt/a by end of H1 2015 - Cape Lambert 50 Mt/a increment (in feasibility study)