IT seems Rio Tinto is getting into the Christmas spirit, announcing a $749m (or A$1b) investment in its existing Greater Tom Price operations to help sustain the production capacity of its world-class iron ore business in the Pilbara.
The hub includes Tom Price, Western Turner Syncline Phase 1 (WTS1) and Western Turner Syncline Phase 2 (WTS2) satellite hubs, with main investment in WTS2 expected to facilitate mining of existing and new deposits, and includes construction of a new crusher as well as a 13-kilometre conveyor.
The new conveyor system will help lower greenhouse gas emissions from the mine by 3.5pc compared to road haulage and, pending final government approvals, is expected to start construction in early 2020 with first ore in 2021.
Rio Tinto iron ore chief executive Chris Salisbury said production of high-quality Brockman ore will support Rio’s flagship Pilbara Blend.
“Our iron ore business continues to deliver industry-leading margins as we drive performance from our mines,” Mr Salisbury said.
“This significant investment in the Greater Tom Price hub is one of a pipeline of high-quality, low-cost options that will underpin production of our flagship Pilbara Blend product well into the future.”
Productivity is expected to be improved with the haul truck fleet at WTS2 to be fitted with Autonomous Haulage System (AHS) technology from 2021, which should result in reduced operating costs on site.
Rio anticipates an attractive internal rate of return with a capital intensity of about $25 per tonne of production capacity – which is included in the company’s existing guidance for Pilbara replacement capital for 2020 to 2022.
