The investment is the first stage of a three-stage expansion program at IOC that could increase concentrate annual capacity to 26 million metric tons. It was initially approved in March 2008 but suspended later that year as the global financial crisis impacted markets worldwide.
IOC Chairman and Rio Tinto chief executive, Iron ore Sam Walsh said the decision highlighted the degree of confidence in growing demand for iron ore, the attractiveness of investing in Canada and the quality and potential of IOC's assets.
"Some uncertainty and potential volatility remain about global economic recovery, but global iron ore and steel markets have rebounded strongly and demand growth looks set to continue. This expansion program is a significant step towards realizing the full potential of our IOC operations. IOC's assets and high quality product, position us strongly for future iron ore demand growth in North America, Europe and Asia.
The revised total project cost for the first stage expansion, including costs spent prior to suspension, is US$497 million (Rio Tinto share US$292 million), a US$22 million increase on the original estimate.