The miner will spend $3.7bn to extend the life of its Pilbara iron ore mine which will increase its production capacity to 353Mt per year by 2015.

Port and rail elements of the project, will be completed which will involve adding two berths on the new Cape Lambert jetty and wharf, over the next four years.

Meanwhile, a total of $570m will be spent on a new gas-fired power station at Cape Lambert.

Rio Tinto Iron Ore chief executive Sam Walsh said the company is continue to see positive prospects for medium- to long-term iron ore demand driven by ongoing growth in Chinese consumption.

"Our Pilbara expansion is already well underway, positioning us to capture the opportunities of this market environment. And we have the natural advantages of a readily-expandable Rio Tinto-operated port and proximity to the Chinese market," added Walsh.

Rio Tinto will spend an additional $501m to develop its Simandou iron ore mine project in Guinea.

The investment, will be used to optimise the mine’s design and infrastructure, rail system and port facilities, where first commercial production is planned in 2015.

The works and plans remain subject to joint venture and regulatory approvals, expected later 2012.