Mining giant Rio Tinto has signed off on its $3.5 billion Koodaideri project.
Rio’s board on November 29 confirmed the miner will invest US$2.6 billion (roughly A$3.5 billion) on the mine, processing and rail project, with first production expected in late 2021.
Koodaideri will add 43 million tonnes of new annual iron ore capacity to Rio’s Pilbara operations.
The operation will sit roughly 35 kilometres from Rio’s Yandicoogina site, and is situated on a high quality deposit: Rio says it expects Koodaideri to facilitate an increase in the higher-value lump component of its Pilbara Blend by roughly 3 per cent, to 38 per cent, at a capital cost of $60 a tonne.
The project will require the construction of a new mine and processing facility, and a 166-kilometre rail line to connect it to Rio’s existing network, which the miner uses to move iron ore to export sites at Dampier and Cape Lambert.
Rio chief executive J-S Jacques said the project would be “the most technologically advanced mine we have ever built”.
Koodaideri will feature technology already in use in Rio’s Pilbara operations – autonomous trucks, trains and drills – but Rio said the project would also “implement systems connecting all components of the mining value chain for the first time”.
“As we pursue our value over volume approach, targeted high quality investments such as Koodaideri will ensure we continue to deliver value for our shareholders and Australians,” Jacques said.
“The project will also deliver significant opportunities for local companies and we expect more than A$3 billion will be spent with Australian-based businesses, with opportunities for about A$2.5 billion of spending for Western Australian-based businesses during its development.”