Rio Tinto will invest US$2.15bn in a major expansion of its iron ore mine in Corumbá in Brazil, increasing the annual capacity of the mine more than six-fold from 2mn tonnes per year to 12.8mn tonnes. New production will commence in the fourth quarter of 2010.
It will also be conducting a feasibility study for an intended phase II expansion that would take capacity to 23.2mn tonnes per year. This study is expected to be completed by mid-2009.
The Corumbá investment brings the total capital expenditure committed by the company since 2003 to develop its iron ore business to almost US$11bn.
The expansion of Corumbá will capitalise on increasing demand for iron ore in South America and the Middle East, as well as increase its presence in Europe.
"The move strengthens our position as the only iron ore producer with a truly global production and growth platform, giving us access to a wide range of markets,” comments Rio Tinto chief executive Tom Albanese.
The expansion plans include the construction of two new ports as well as a new long-term trans-shipping services contract that will enable ocean-going vessels to be topped up before shipping to markets.
During construction, the project will employ close to 2,500 people in Corumbá and La Agraciada in Uruguay, and will at least double the permanent workforce across mine, ports and river operations to more than 1,600.
The expanded operations will cross a number of jurisdictions, with the new northern river port to be set up at Albuquerque in Brazil, and the southern river port will be constructed in Agraciada in Uruguay.
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