Rio Tinto receives approval for Hope Down

Australian iron ore miner Rio Tinto said Thursday that it would immediately start construction of the Hope Downs iron ore project in Western Australia. Rio Tinto said the decision follows receipt of the Western Australian state government's approval and the formation of the Hope Downs joint venture with Hancock Prospecting Pty Ltd. The company said the initial capital cost to develop the lode will be around $590 million, which will be shouldered by the two partners. Rio Tinto will commit an extra $390 million to cover the capital cost of the rail, rolling stock and power infrastructure. Stage one will have an annual capacity of 22 million metric tons, with first production expected in early 2008. In stage two, output will reach 30 million metric tons.