Where there’s iron there’s money

THE fresh wave of money pouring into the mining sector continues to build, with news Rio Tinto and two Japanese partners have agreed to invest more than $2 billion in the mining giant’s iron ore operations.

The latest investment is expected to create 1200 jobs during the construction phase, Rio said in a statement yesterday.

The Anglo-Australian miner and Japan’s Mitsui, and Nippon Steel & Sumitomo Metal have announced plans to invest $US1.55 billion ($2.15 billion) at two mining hubs in Western Australia’s Pilbara.

Rio’s share of the investment totals $US820 million.

The investment will develop new deposits at the Robe Valley and West Angelas operations in order to maintain output of Rio’s “Pilbara blend” — a recognised type of iron ore popular with steel mills.

Existing deposits within the mining areas are approaching exhaustion.

Rio owns 53 per of the mines, while Mitsui accounts for 33 per cent and Nippon 14 per cent.

Construction will begin next year and the first ore will be sent to market from 2021.

While the project will generate more than 1000 construction jobs, it will also involve Rio converting 34 manned trucks into driverless vehicles.

“The approval of these two projects highlights the strong pipeline of development options within our portfolio as we remain focused on our valueover-volume strategy,” Rio Tinto iron ore chief executive Chris Salisbury said.

The latest spend by Rio follows BHP Billiton’s decision in June to pull the trigger on its single-biggest investment since the peak of the mining boom, approving the development of the $US3.4 billion South Flank mine in the Pilbara.

Fortescue Metals, backed by mining billionaire Andrew Forrest, is developing a new $1.7 billion mine and rail project dubbed Eliwana at its Pilbara operations.

Rio is also spending $200 million to carry out early work on a new mine called Koodaideri, which is ultimately expected to cost $US2.9 billion to build.