Rio Tinto to invest $388m in final stage of Silvergrass mine

Mining giant Rio Tinto said it would invest an incremental $338m to complete the development of the Silvergrass mine in its Pilbara iron ore operations in Western Australia.

The company said the brownfield expansion of the high-grade Silvergrass mine offered attractive returns, with an expected internal rate of return “well in excess of 100%” and a pay back of less than three years.

“It is a key element in maintaining Rio Tinto's premium Pilbara blend, and also delivers incremental tonnage and lower unit costs. As anticipated in previous guidance, this Silvergrass investment adds 10m tonnes of capacity,” Rio said in a statement.

“The investment will lower mine operating costs by replacing road haulage with a more efficient conveyor system that links the Silvergrass operations to our existing processing plant at Nammuldi.”

"The additional low-phosphorus tonnes that Silvergrass delivers will sustain the long-term viability of our Pilbara blend, ensuring continued premium pricing, whilst also lowering our operating costs through infrastructure improvements."

Silvergrass is a satellite deposit located adjacent to Rio Tinto's Nammuldi mine and is part of the Greater Nammuldi precinct, located approximately 70 kilometres north-west of Tom Price.

Ore from the Silvergrass mining operations is high-quality, low-phosphorus Marra Mamba ore that is treated at the Greater Nammuldi processing plant and blended into Rio Tinto's premium Pilbara blend product.