Australia grants Rio Tinto green light for iron ore mine in Pilbara

November 18, 2014

Rio Tinto received the green light for the development of its Koodaideri iron ore mine in Australia’s Pilbara region.

Australia’s Environmental Protection Authority awarded conditional approval for the greenfields and infrastructure proposal for the 70 Mt/a (77 million stpy) mine that will be operated by Rio Tinto subsidiary Mount Bruce Mining.

If approved by the state's Minister for Environment Albert Jacob, the mine is expected to produce up to 70 Mt/a (77 million stpy) of iron ore a year for a mine life of 30 years. Rio's Pilbara division is on track to export about 270 Mt (297 million st) in the 2014 calendar year, so the new mine would contribute a meaningful amount to the company's production volume, as well as sustaining pressure on the region's smaller miners, The Age reported.

A sharp fall in the iron ore price this year to about $89/t ($81/st) has put serious pressure on junior Pilbara iron ore miners, many of which are struggling to break even and are blaming Rio Tinto and BHP Billiton for flooding the market and causing prices to crash.

The project is part of Rio Tinto's long-term plans to boost its Pilbara exports to 360 Mt/a (396 million stpy) as part of its "breakthrough pathway for iron ore expansion in Australia."

That pathway proposed to build cheaper brownfields expansions at mines such as Yandicoogina and West Angelas, and delay an investment decision on new, more expensive greenfields mines such as Koodaideri and Silvergrass.

The company said an investment decision on Silvergrass had been deferred to the third quarter of this year and the earliest decision on the Koodaideri deposit has been postponed to 2016.

EPA chairman Paul Vogel has set 14 conditions for the development of the mine and surrounding infrastructure, including strict rehabilitation and offset requirements and the creation of an exclusion zone to protect local species. The proposal was brought to the EPA in 2012 and was assessed under the authority's highest level of scrutiny.

Vogel said Rio had sought to avoid, minimize and rehabilitate environmental impact through the proposal's design and had conducted numerous studies to address issues raised in the public submissions. Five public and 11 agency submissions were received during the comment period. The proposal is open to a two-week public appeals period, before going to the minister for a final decision.



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