Rio Tinto has given the green light for a $3.5 billion investment in its new Koodaideri iron ore mine, replacing depleted capacity elsewhere and creating 600 permanent jobs in Western Australia.
Construction on the project will start in 2019, with first production in late 2021.
The mine will have an annual capacity of 43 million tonnes – 7.5 per cent above initial estimates – and it will underpin the mining giant’s flagship Pilbara blend iron ore.
Rio said the highly automated mine will be Rio’s lowest cost contributor to the Pilbara blend, and increase the higher-value lump component from a current average of 35 per cent to about 38 per cent.
“Koodaideri is a game-changer for Rio Tinto,” Rio Tinto chief executive Jean-Sebastien Jacques said in a statement on Thursday.
“It will be the most technologically advanced mine we have ever built and sets a new benchmark for the industry in terms of the adoption of automation and the use of data to enhance safety and productivity.”
As well as the mine itself, Rio plans a 166km rail line, an airport, support facilities and accommodation for employees.
More than 2,000 people will work on the construction, with 600 permanent roles once the mine is operational.
“This further investment in our iron ore business is also a multi-billion dollar vote of confidence in Western Australia,” Mr Jacques said.
“The project will also deliver significant opportunities for local companies and we expect more than $3 billion will be spent with Australian-based businesses, with opportunities for about $2.5 billion of spending for Western Australian-based businesses during its development.”
At 1130 AEDT, Rio Tinto’s ASX-listed shares were three per cent higher at $74.135 against the backdrop of an overall 0.8 per cent rise.