Rio Tinto has upped its estimates for the amount of iron ore at its deposits in Western Australia’s Pilbara region, a day after its earnings beat expectations.
After completing 700 kilometres of drilling across multiple sites, Rio Tinto now estimates the deposits at Music Hall, Old Vic and Western Hill contain 449 million more tonnes of iron ore than previously thought.
Rio Tinto owns other mines in the region and said it would use open pit mining to extract the resources.
They are located in Western Australia’s Hamersley Basin, “the host to some of the most significant iron ore deposits in the world,” Rio Tinto said on Thursday.
Overall the changed estimates, plus a few others, mean that the global miner has 23.3 billion tonnes of mineral reserves, up from the 22.5 billion previously estimated.
Rio Tinto on Wednesday evening released its earning results, announcing $US8.8 billion ($A12.3b) in after-tax earnings and announced a special dividend for shareholders.
“Overall a solid result which saw only minor changes to 2019/20e earnings,” UBS analysts wrote in a letter to clients.
The investment bank raised its valuation of the miner’s shares to $90.04, from $89.50, and reiterated its buy rating.
Westpac analysts wrote the results “illustrat[ed] the strength of the company’s portfolio and the overarching focus on value over volume and capital discipline (with shareholders and the balance sheet the beneficiaries).”
Rio Tinto shares were up 2.06 per cent, or $1.94, to $97.06 at 1252 AEDT. They are up 23.7 per cent on the year and are at their highest level since mid-2008.