Rio Tinto to invest $749m in Pilbara iron ore mine

Rio Tinto on Wednesday said it had approved a $749m (£583m) investment to cut costs and maintain production at its Greater Tom Price operations in Western Australia's Pilbara region.

The Anglo-Australian miner said the investment in the Western Turner Syncline Phase 2 mine would support extraction of existing and new iron ore deposits, the construction of a new crusher and 13-kilometre conveyor.

The new conveyor system would help lower greenhouse gas emissions from the mine by 3.5% compared to road haulage and Rio was “continuing to assess additional options to reduce emissions including renewable energy”, the company said in a statement.

It added that it would aim to turn half of its truck fleet into autonomous vehicles at the mine by the end of next year.

Construction was expected to start in the first quarter of 2020 with first ore from the crusher expected in 2021.

“Production of high-quality Brockman ore will support the company's flagship Pilbara Blend, which continues to be the preferred baseload product for China's steel mills,” Rio said.

The project was expected to deliver an internal rate of return with a capital intensity of about $25 per tonne of production capacity. The investment is included in Rio Tinto's existing guidance for Pilbara replacement capital for 2020 - 2022, the company added.

Chief executive Chris Salisbury said the investment “is one of a pipeline of high-quality, low-cost options that will underpin production of our flagship Pilbara Blend product well into the future”.