Rio Tinto to expand western Australia operations

New port facilities for Rio Tinto in western Australia will help boost capacity. Photo: Rio Tinto files.

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Mining giant Rio Tinto has announced the $200m expansion of its iron ore operations in Western Australia.

The cash injection will be used to fund dredging contracts as part of early works on the expansion of the Cape Lambert port (CLB), supporting the Pilbara operations' overall capacity increase by 50 percent to 330 million tonnes a year.

The dredging will be completed as part of the proposed construction of an additional 1.8km, four-berth jetty and wharf at Cape Lambert to increase its current annual capacity of 80 million tonnes by a further 100 million tonnes.

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Rio Tinto chief executive Iron Ore and Australia Sam Walsh said the dredging works would help ensure that subsequent decisions on the expansion of operations could be implemented as quickly and efficiently as possible.

"Rio Tinto has a proven track record of managing large-scale iron ore expansion projects, and this decision should be seen in that light. It is important at this stage that we advance this process in an orderly manner, and this decision does that," Mr Walsh said.

The company’s decision to forge ahead with plans to expand came after Australia’s labour government backed down on plans to introduce a “super tax” on mining profits, reducing its headline rates from 40% to 30%.

Rio Tinto had put all of its operations in Australia under review following the announcement of the super tax.

The move ultimately led to the resignation of Kevin Rudd as prime minister, and the appointment of Julia Gillard as Australia’s first ever female prime minister.

"While the Australian Government's decision to abandon its Resource Super Profits Tax in favour of the proposed Minerals Resource Rent Tax was a major step forward, we remain cautious over what legislation will finally be in place."

The dredging works are dependent upon a number of government and other approvals, most notably that of the Robe River joint venture partners with regard to the Cape Lambert port.