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Rio Tinto to Commence Expansion of Corumbá Iron Ore Mine in Brazil
08/04/2008 - Rio Tinto will invest US$2.15 billion in a major expansion of its iron ore mine in Corumbá, Brazil, that will boost the mine’s annual capacity more than six-fold to 12.8 million tonnes, with new production commencing in the fourth quarter of 2010.
Rio Tinto will invest US$2.15 billion in a major expansion of its iron ore mine in Corumbá, Brazil. The expansion will boost the mine’s annual capacity more than six-fold, from 2 million tonnes per annum to 12.8 million tonnes, with new production commencing in the fourth quarter of 2010. The company is also to undertake a feasibility study, to be completed by mid-2009, for a Phase II expansion that would take capacity to 23.2 million tonnes per annum.
US$2.11 billion will be used for expansion of the Corumbá mine and its associated logistics chain (100% Rio Tinto), including US$121 million in long-lead items. An additional US$42 million will fund the Phase II feasibility study.
The expansion of Corumbá, which produces high-quality blast-furnace lump and direct-reduction products, will capitalize on increasing demand for iron ore in South America and the Middle East, and will also help to increase Rio Tinto's presence in Europe.
“This is a very significant step forward in our drive to extend iron ore operations beyond the Pilbara region in Western Australia,” said Rio Tinto chief executive Tom Albanese. “The development of Corumbá reinforces our capability to expand capacity rapidly to match increased demand wherever it occurs.
“The move strengthens our position as the only iron ore producer with a truly global production and growth platform, giving us access to a wide range of markets.”
The Corumba investment brings Rio Tinto’s total capital expenditure commitment for developing its iron ore business to nearly US$11 billion since 2003. Rio Tinto outlined a global pathway to grow iron ore production to more than 600Mtpa from 179Mtpa in 2007 late last year*.
The expansion comprises the construction of two new ports as well as an improved infrastructure network to link the 2,500-km, multi-national supply chain. In addition, a new long-term trans-shipping services contract will enable ocean-going vessels to be topped up before shipping to markets.
Rio Tinto Iron Ore chief executive Sam Walsh said, “This is a most significant project—locally and internationally. It is scalable, it combines greenfields and brownfields opportunities, and it allows us to market an upgraded lump product through demonstrated drying technology.”
Mining at Corumbá is relatively simple, with no blasting required and extremely shallow waste material covering the ore. The existing 2 million tonnes/year operation will continue unaffected by the new greenfields operation.
The expanded operation will continue to be multi-jurisdictional: a new northern river port will be established at Albuquerque in Brazil, barging operations will operate through the international zone of the River Paraguay; a new southern river port will be constructed at Agraciada in Uruguay (all 100% Rio Tinto), and trans-shipping operations will be conducted in the international waters of the Rio de La Plata. The trans-shipping is necessary to enable larger Panamax and Capesize vessels to be loaded.
Rio Tinto will be assisted with project management by Sandwell Canada Inc., a company with substantial ports and water logistics expertise, and experience of delivering projects in South America. Brazilian contractor, SNC Minerconsult will also assist Rio Tinto on mine plant aspects.
"The Rio Tinto Iron Ore project management team is very familiar with this type of work. Much of the US$11 billion for iron ore growth has been spent or committed in the Pilbara region of Western Australia, where the team continues to complete projects within time and budget," said Walsh.
The expansion will be subject to a number of regulatory approvals.
*Rio Tinto's attributable share of 320 and 420 million tonnes/year of iron ore production at its Pilbara operations is approximately 80 to 85%. Rio Tinto's attributable share of its global iron ore production beyond 600 million tonnes/year is approximately 85%.
Rio Tinto is a leading international mining group headquartered in the U.K., combining Rio Tinto plc and Rio Tinto Limited. Rio Tinto's business is finding, mining, and processing mineral resources. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe, and southern Africa.
