28th Nov 2013 07:59
LONDON (Alliance News) - Mining giant Rio Tinto PLC Thursday announced a plan to optimize the growth of its world-class iron ore business in Western Australia.
The company said mine production capacity will increase towards 360 million tonnes a year at a significantly lower capital cost per tonne than previously planned.
From a base run rate of 290 tonnes a year by the first half 2014 end, mine production capacity will increase by about 60 million tonnes a year between 2014 and 2017. The majority of the low-cost growth will be delivered in the next two years with mine production of more than 330 million tonnes in 2015.
Rio Tinto expects low-cost brownfield expansions to bring on early tonnes to feed the expanded infrastructure currently being developed. In line with the brownfield expansions, the company approved USD400 million of capital expenditure for plant equipment and modification, and additional heavy machinery for use at various mine sites in the Pilbara.
The additional production will be achieved at a capital intensity of USD120 to 30 a tonne (low-USD100s a tonne Rio Tinto share), including the cost of infrastructure growth and mine capacity.
The above mentioned metric figures is expected to be achieved mainly through a combination of expanding production at existing mines and securing further low-cost productivity gains, such as those delivered by Rio Tinto's pioneering Mine of the Future programme, together with the proposed future development of the greenfield Silvergrass mine.
Copyright RTT News/dpa-AFX
Related Shares:
Rio Tinto