Rio Tinto has budgeted for three significant infrastructure projects in support of ongoing expansions of its iron ore production capacity in the Pilbara region of Western Australia. A US$520-million project (Rio Tinto share $417 million) will upgrade Rio Tinto’s integrated Pilbara power and gas network; a $313-million project (Rio Tinto share $289 million) will add to its fuel infrastructure; and a $310-million project will assure a sustainable water supply.

The power and gas project will deliver an additional 120 MW to sustain current capacity of 225 million mt/y and support expansion to 283 million mt/y. Two 40-MW open-cycle gas turbines will be installed as part of a new power station near the West Angelas mine, and a 40-MW open-cycle gas turbine will be built at the existing Yurralyi Maya power station near Dampier on the coast. The investment also provides for associated power infrastructure, such as substations, gas pipelines and transformers.

The fuel infrastructure project will support expansion to 283 million mt/y of iron ore production capacity and provide some of the capacity needed for further expansion to 333 million mt/y. On completion, the fuel network will have a total storage capacity of 100 million liters, with 56 million liters of additional capacity at the Parker Point port terminal at Dampier. Two new inland distribution hubs will also be created, removing the requirement for two trains to transport fuel from Port Hedland, some 400 km to the north.

The water supply project will ensure a sufficient water resource to accommodate expansion to 333 million mt/y of iron ore production capacity. Rio Tinto will build, own, and operate a new borefield, located in the lower Bungaroo Valley, 35 km southeast of the town of Pannawonica, with an annual capacity of 10 gigaliters. The project, including the associated pipeline system, will be completed by mid-2013, coinciding with the first ore from the planned increase in production capacity to 283 million mt/y.

Regarding the water supply project, Rio Tinto Chief Executive, Iron Ore and Australia, Sam Walsh said, “This decision will provide significant benefits for the communities of the Pilbara region and represents a huge vote of confidence in the coastal communities of Dampier, Karratha, Wickham, Roebourne and Port Samson, towns for which Rio Tinto has supplied critical infrastructure since the Pilbara was developed. By freeing up water supply for our growing communities, this project will support the ‘Pilbara Cities’ initiative of the government of Western Australia.”

Rio Tinto’s schedule for expanding its integrated Pilbara operations from current operating capacity of 225 million mt/y calls for increases to 230 million mt/y by the end of the first quarter of 2012, to 283 million mt/y by the end of the first half of 2013, and to 333 million mt/y by the end of the first half of 2015.

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