Rio commits $3.64 billion to Pilbara

20 Jun 2012, 7:00 pm   -   Source: AAP
(AAP)

(AAP)

Rio Tinto will spend $3.64 billion to increase its iron ore production in Western Australia's Pilbara region.

Rio Tinto has committed $US3.7 billion ($A3.64 billion) to expanding its massive iron ore operations in Western Australia's Pilbara region.

The world's second largest iron ore producer said mining in the Pilbara presented long-term growth prospects.

That's despite recent comments from big mining companies about uncertainty created by falling commodity prices, slowing growth in China and economic woes in Europe and the United States.

"We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario," Rio Tinto chief executive Tom Albanese said in a statement.

"Today's announcement is in line with our long-held strategy of investing in and operating long-life, low-cost, tier one assets, and consistent with our view of the economic outlook."

Rio will spend $US2 billion ($A1.97 billion) over the next four years on port and rail developments that will expand its production capacity in the Pilbara to 353 million tonnes per annum from 2015.

A further $US1.7 billion ($A1.67 billion) will be spent to extend the life of the Yandicoogina mine in the Pilbara to 2021 and expand its capacity by six million tonnes per annum.

Rio has also committed $US501 million ($A493.28 million) to develop infrastructure at the Simandou iron ore project in Guinea.

Rio shares were up 95 cents, or 1.67 per cent, at $57.72 on Wednesday.

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