Anglo-Australian mining group Rio Tinto has announced its intention to invest US$2.15 billion in a major expansion of its Brazilian iron ore mine in Corumbá.
The investment is intended to increase the annual capacity of the mine, which produces high-quality blast-furnace lump and direct reduction products, by more than six times, from two million mt per year to 12.8 million mt, with the expansion based on the rising demand for iron ore in South America and the Middle East. The new production is scheduled to commence in the fourth quarter of 2010.
Moreover, Rio Tinto also plans to undertake a feasibility study, to be completed by the middle of 2009, for a Phase II expansion that will allow an increase of the mine's capacity to 23.2 million metric tons per annum.
Commenting on the investment, Rio Tinto CE Tom Albanese said, "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."
About US$2.11 billion will be used for the expansion of the Corumbá mine and its associated logistics chain, including US$121 million in long-lead items. A further US$42 million will fund the Phase II feasibility study.
As a part of the Corumbá operation, Rio Tinto is to construct two new ports together with improved infrastructure networks to link the 2,500-kilometre multinational supply chain. In addition, a new long-term transshipping services contract will enable ocean-going vessels to be topped up before shipping to markets.
With the aim of developing its ore business, Rio Tinto has invested about US$11 billion in the Corumbá mine since 2003.