Rio Tinto has approved an investment of A$3.5bn ($2.6bn) in the Koodaideri iron ore mine in the Pilbara region in Western Australia.
Rio Tinto's Q3 2019 Pilbara iron ore production has rebounded after earlier setback (Credit: Rio Tinto)
Located about 110km from Newman, the Koodaideri iron ore mine with an estimated annual capacity of 43 million tons will underpin production of the Pilbara Blend iron ore product, said Rio Tinto.
Subject to a final approval from the Western Australian government, the iron ore project is expected to break ground in 2019 with an aim to achieve first production in late 2021.
Rio Tinto, which is the sole owner of the Koodaideri iron ore mine, will develop it in two phases. The project is anticipated to turn into a new production hub for the mining giant’s iron ore business in the Pilbara region with the addition of a processing plant and infrastructure, which would include a 166km rail line to connect the mine with the existing network.
Phase 1 of the Koodaideri iron ore mine project will help the mining firm in sustaining its existing production capacity by replacing depletion at another location in the system. The new iron ore project is expected to lift the current average lump component of Pilbara Blend by 3% or so to nearly 38%, depending on market conditions.
Phase 2 of the iron ore project is aimed at boosting annual capacity from the Koodaideri production hub to more than 70 million tons. The company has approved a $44m pre-feasibility study for the second phase.
Rio Tinto said that a final investment decision on Koodaideri phase 2 will be based on the outcomes of the study along with the company’s value over volume approach.
The mining major claims the Koodaideri iron ore mine will become its first intelligent mine in the Pilbara region through the implementation of a combination of digital assets, advanced data analytics and automation. The iron ore project will make use of autonomous trucks, trains and drills in addition to deploying systems that will connect all components of the mining value chain.
Overall, the Koodaideri iron ore project is expected to create more than 2,000 jobs for its construction followed by 600 permanent jobs for its operations.
Rio Tinto chief executive J-S Jacques said: “Koodaideri is a game-changer for Rio Tinto. It will be the most technologically advanced mine we have ever built and sets a new benchmark for the industry in terms of the adoption of automation and the use of data to enhance safety and productivity.
“As we pursue our value over volume approach, targeted high quality investments such as Koodaideri will ensure we continue to deliver value for our shareholders and Australians.”