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Rio Tinto, fighting an approach by rival BHP Billiton, said it had completed a US$1.4 billion ($1.8 billion) upgrade of its Dampier iron ore port in Western Australia on time and budget.
Rio has announced a series of initiatives to build its iron ore mining business since BHP made an overture in November to acquire the company with its own scrip.
"We are investing heavily to help Rio Tinto take advantage of the strong demand growth in the global market, particularly in China," Sam Walsh, Rio Tinto's iron ore division chief executive said yesterday.
Rio Tinto recently said prices for iron ore from Australia to Chinese ports were on average US$50 a tonne less than the price from Brazil, due to the huge difference in freight rates from Australia to China compared with from Brazil.
Annual capacity of the port in Western Australia was increased to 140 million tonnes from 74 million tonnes, it said.
A key feature of the upgrade was the installation of two new ship loaders at the port to allow two vessels to be loaded simultaneously and up to four vessels to be berthed at one time, reducing the time ships wait to be loaded, the company said.
Rio on Monday unveiled plans to buy three freight carriers for US$315 million to help transport iron ore from Western Australia, where it has allocated more than US$1 billion for expansion work.
Rio Tinto is the world's second largest iron ore miner behind Brazil's Vale. BHP is No 3.
Rio immediately rebuffed BHP's advances, although BHP has persisted in promoting what it calls "compelling synergies" in a tie-up, underscored by the two companies' neighbouring iron ore operations in Australia.
Britain's Takeover Panel overseeing corporate acquisition activity has ordered BHP to decide by February 6 whether to make a bid for Rio or walk away under a "put up or shut up" clause.
Shares in Rio were down 0.25 per cent at A$127.68 ($145.71), but outperforming a broader market that was down nearly 1 per cent. BHP was off 1 per cent at A$38.68.
- Reuters
