The Rio Tinto Group has approved the expansion of its iron ore operations in Australia. The company is to invest $676 million over the next six months to profit from ever growing global thirst for iron ore. The funds have been sanctioned to enhance work on port and rail engineering projects in the Pilbara region.
Sam Walsh, the company's chief executive of iron ore and Australian operations said that they were taking the opportunity to bring forward the next phase of Rio Tinto’s major capacity expansion to reap the benefits early and at no additional cost.
Mr Walsh said that as the demand outlook continued to be strong, with supply lagging elsewhere in the industry and they were seeing new supplies proving slower to materialise than predicted. Exports of iron ore from Australia are likely to hit 425 million tonnes this year, up by 5.5% compared to last year.
Rio Tinto is not the only mining company pouring money into the Pilbara region as rivals BHP Billiton and Fortescue Metals also rapidly follow through in their own expansion plans. BHP Billiton also said that it plans to spend $US6.6bn expanding capacity in the Pilbara to 220 million tonnes of iron ore a year, including the development of a new mine set to begin production in early 2014.