Rio Tinto to Invest $1.2 Billion in Australian and Canadian Iron Ore Operations

By Joel ScanlonFeb 13 2011

Rio Tinto is to invest $1.2 billion to expand mining operations in Australia and Canada. The mining giant intends to spend $933 million on the Marandoo iron ore mine in Australia to prolong its life by another 16 years till 2030. Another $277 million will be invested in the Iron Ore Company of Canada to raise concentrate production capacity by 40% to 26 million tonnes annually.

The Rio Tinto Iron Ore Chief Executive Officer Sam Walsh heads the second largest iron ore producing group after Brazil’s Vale. He said that the extension at Marandoo mine plays an important part in sustaining the Pilbara operation’s annual capacity rate, complementing the major expansion programs now underway.

The company said that it was in possession of some of the government and regulatory approvals required for the expansion and the rest were progressing well and on schedule. The project currently produces 15 million tons per year or iron ore.

The second phase of a three stage expansion at the Canadian project hopes to raise the production capacity from 18 million tons per annum to 26 million tons. The plan was announced in May 2010 and increasing the production at a time when global demand is great for iron is escalating does make good sense.