27th Apr 2006 08:24
Rio Tinto PLC27 April 2006 US$1 billion Hope Downs mine development approved Rio Tinto today announced it will immediately start construction of the US$1billion Hope Downs iron ore project in Western Australia, following WesternAustralian Government approval and the ratification of the Hope Downs JointVenture. Rio Tinto and its joint venture partner, Hancock Prospecting Pty Limited, willproceed with the development of the Hope Downs iron ore project at an estimatedcapital cost of US$590 million. Rio Tinto and Hancock Prospecting will share themine development cost. Stage one will have an annual capacity of 22 milliontonnes, with first production expected in early 2008. At the completion of Stagetwo the annual capacity of the mine will be 30 million tonnes. Rio Tinto will commit an additional US$390 million to cover the capital cost ofthe rail, rolling stock and power infrastructure required for this development. Rio Tinto Iron Ore chief executive Sam Walsh said, "Rio Tinto's leading role inthe global traded iron ore market, our existing Pilbara infrastructure and ourindustry expertise in project construction are fundamental to the rapiddevelopment of this excellent new project." "The Hope Downs deposits complement Rio Tinto Iron Ore's existing assets inWestern Australia and will enhance our ability to offer customers a reliablelong term source of high quality ore." Mr Walsh said that since Rio Tinto's acquisition of its 50 per cent interest inthe Hope Downs project, the Group has worked closely with Hancock Prospecting tobring this project to reality. "This project demonstrates Rio Tinto's continuing commitment to the responsibledevelopment of Western Australia's mineral resources." Mr Walsh thanked the Western Australian Government for its assistance with theoverall approval process and said that the outcome reflects its strong supportfor the joint venture Production from the high grade Marra Mamba iron ore deposit will initially comefrom the Hope Downs One mining area, which has high grade reserves of 346million tonnes. Construction of the mine and the 58 kilometre Lang Hancock Railway, which willconnect to Rio Tinto's existing rail and port infrastructure, will beginimmediately. Note to editors: • In July 2005, Rio Tinto reached agreement with Hancock Prospecting PtyLimited to purchase a 50 per cent interest in the iron ore assets of Hope DownsIron Ore Pty Limited. • The Hope Downs project is a 50:50 unincorporated joint venture betweenRio Tinto and Hancock Prospecting to develop the Hope Downs iron ore assets. • The Hope Downs joint venture assets include the Hope Downs 1, 2 and 3 and Hope Downs 4, 5 and 6 (formerly East Angelas 1, 2 and 3) deposits. • Rio Tinto will manage the development and operation of the project assets subject to a joint Rio Tinto Iron Ore and Hancock Prospecting Pty Ltd Management Committee. • The project will use Pilbara Iron managed port, rail and power infrastructure. • Following completion of a joint venture feasibility study, JORC compliant reserves and resources were determined as follows: • Hope Downs One deposit contains Marra Mamba iron ore reserves of 346 million tonnes at 61.6 per cent Fe Category Tonnage Fe Grade Proved Reserve 68 Mt 61.3 %Probable Reserve 278 Mt 61.7 %Total Reserve 346 Mt 61.6 % • Hope Downs assets (including Hope Downs One resources exclusive of reserves) contain iron ore resources of 644 million tonnes at a weighted average grade of 61.3 per cent Fe. These contain a mixture of Brockman, Marra Mamba and detrital ore. Category Tonnage Fe Grade Measured Resource 9 Mt 61.3 %Indicated Resource 174 Mt 61.7 %Inferred Resource 461 Mt 61.2 %Total Resource 644 Mt 61.3 % • The resource and reserves for Hope Downs One have been prepared in accordance with the JORC Code (2004) by suitably qualified competent persons, as detailed below: • Competent Person Resources: John Phillips - 20 years experience in production geology roles, of which 13 years are in Iron Ore. BSc (Geology) 1987. Member AusIMM - No. 210415 • Competent Person Reserves: Peter Sage - 21 years experience in operations technical & management roles, of which six years are in Iron Ore. BSc Hons. (Mining Geology) 1984. Member AusIMM - No.108846 For further information, please contact: LONDON AUSTRALIA Media Relations Media Relations Nick Cobban Ian Head Office: +44 (0) 20 7753 2305 Office: +61 (0) 3 9283 3620 Mobile: +44 (0) 7920 041 003 Mobile: +61 (0) 408 360 101 Investor Relations Investor Relations Nigel Jones Dave Skinner Office: +44 (0) 20 7753 2401 Office: +61 (0) 3 9283 3628 Mobile: +44 (0) 7917 227 365 Mobile: +61 (0) 408 335 309 David Ovington Susie Creswell Office: +44 (0) 20 7753 2326 Office: +61 (0) 3 9283 3639 Mobile: +44 (0) 7920 010 978 Mobile: +61 (0) 418 933 792 Website: www.riotinto.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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