Rio Tinto OKs $338 Million to Complete Silvergrass Iron Ore Mine Expansion
August 02 2016 - 7:37AM
Dow Jones News
By Alex MacDonald
LONDON--Mining giant Rio Tinto PLC (RIO) said Tuesday it has
approved a previously flagged plan to invest $338 million to
complete the development of its Silvergrass iron ore mine in the
iron-rich Pilbara region of Western Australia.
The brownfield expansion will add another 10 million tons of
additional production capacity to the high-grade mine, resulting in
a pay back of the original investment in less than three years and
a return on investment of more than 100%.
The investment will lower mine operating costs by replacing road
haulage with a more efficient conveyor system that links the
Silvergrass operations to Rio's existing processing plant at
Nammuldi, where the iron ore is mixed into a special blend.
"The additional low-phosphorus tonnes that Silvergrass delivers
will sustain the long-term viability of our Pilbara blend, ensuring
continued premium pricing, whilst also lowering our operating costs
through infrastructure improvements," said Rio Tinto Chief
Executive Jean-Sebastien Jacques, who took over as CEO last
month.
Rio Tinto's shares in London were down 1.3% at 2,454.5 pence a
share at 1056 GMT, while the FTSE 350 mining index was down
0.7%.
Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
August 02, 2016 07:22 ET (11:22 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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