Rio Tinto will move ahead with an expansion at its Pilbara iron ore division in a show of defiance against sliding iron ore prices and the current supply glut, the Sydney Morning Herald reported.
In a move that will sustain pressure on smaller producers and the iron ore price, Rio Tinto has sought permission from federal regulators in recent days to build a new brownfields mine next to its existing Yandicoogina iron ore mine in the Pilbara. Named the "Yandicoogina Pocket and Billiard South Iron Ore Mine," the project is expected to last for 16 years. Rio's Pilbara division is on track to export about 270 Mt in the 2014 calendar year, so the new mine will provide a meaningful amount of the company's production volumes.
The project is part of Rio's long-term plans to grow its Pilbara exports to 360 Mt/a, and the seeds for the new project were sown in November 2013, when Rio revealed its "breakthrough pathway for iron ore expansion in Australia."
That pathway proposed to build cheaper brownfields expansions at existing mines like Yandicoogina and West Angelas, and delay an investment decision on new greenfields mines like Silvergrass and Koodaideri.
In documents submitted to the federal government, Rio Tinto said the mine would begin production in 2017 if approved.