London: Rio Tinto will invest US$2.15 billion in a major expansion of its iron ore mine in Corumbá, Brazil, boosting annual capacity of the mine more than six-fold from 2 million tonnes per annum to 12.8 million tonnes, with new production commencing in the fourth quarter of 2010. The company will also undertake a feasibility study, to be completed by mid-2009, for a Phase II expansion that would take capacity to 23.2 million tonnes per annum.
The Corumba investment brings to nearly US$11 billion the total capital expenditure that Rio Tinto has committed since 2003 to develop its iron ore business. Rio Tinto outlined a global pathway to grow iron ore production to more than 600Mtpa from 179Mtpa in 2007 late last year *.
The expansion of Corumbá, which produces high-quality blast-furnace lump and direct reduction products, will capitalise on increasing demand for iron ore in South America and the Middle East, and increase Rio Tinto's presence in Europe.
Rio Tinto chief executive Tom Albanese said "This is a very significant step forward in our drive to extend iron ore operations beyond the Pilbara region in Western Australia. The development of Corumbá reinforces our capability to expand capacity rapidly to match increased demand wherever it occurs.
"The move strengthens our position as the only iron ore producer with a truly global production and growth platform, giving us access to a wide range of markets."
US$2.11 billion will be used for expansion of the Corumbá mine and its associated logistics chain (100 percent Rio Tinto), including US$121 million in long-lead items. A further US$42 million will fund the Phase II feasibility study.
Two new ports will be constructed together with improved infrastructure networks to link the 2,500-kilometre, multi-national supply chain. In addition, a new long-term trans-shipping services contract will enable ocean-going vessels to be topped up before shipping to markets. [31/7/08]
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