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Rio Tinto said on Monday it would spend US$71 million ($93 million) on a study to expand its Hope Downs iron ore mine in Australia.
The study comes as Rio allocates at least US$1 billion to increase its overall mining capacity from Australia's ore-rich Pilbara region to 320 million tonnes a year in about five years.
Rio, the world's number two-ranked iron ore miner by volume behind Brazil's Vale, has been promoting its growth prospects since BHP announced a US$139 billion three-for-one share offer proposal for Rio on November 8. Rio immediately rebuffed the overture, 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.
The US$71 million study in the Pilbara follows a commitment by Rio to spend a further US$350 million to rapidly boost projected output at the Hope Downs mine, pre-dating BHP's proposal. Work on the Hope Downs project started last year, with the first production runs expected early 2008.
- REUTERS
