Mining giant Rio Tinto has announced its next iron ore investment phase, unveiling a $4.1 billion spending plan to develop its tier one irone ore business.

 

The spending will see the company invest $3.6 billion in its Pilbara operations, while $491 million will be spent on the company’s iron ore project in Guinea.

 

We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario. Our superior Pilbara iron ore business has one of the highest margins in the industry, low capital intensity of investment and a strong track record of completing projects on time and budget,” Rio Tinto CEO Tom Albanese said.

 

Rio Tinto’s Iron Ore chief Sam Walsh said the move to increase capital expenditure in its iron ore business was in response to continued demand from China.

 

“We continue to forecast that annual Chinese steel production will grow from its current level of around 700 million tonnes to around one billion tonnes a year out towards 2030,” Mr Walsh said.

 

The expansion to the company’s Pilbara operations will see the construction of major infrastructure works, including two berths on the new Cape Lambert jetty and wharf, the replacement of the existing original Cape Lambert rail car dumper, and the Rail Capacity Enhancement project which includes a significant amount of rail track duplication and rolling stock improvements. 

 

The spending in Guinea will provide for rail and port infrastructure with first commercial production planned for mid-2015.