Diversified-miner Rio Tinto on Wednesday announced it had approved $667-million for the funding of infrastructure and studies for mine expansions as part of its aim to increase the capacity of its Pilbara iron-ore operations, in Australia, from about 163-million tons a year to 320-million tons a year by 2012.

The company said this funding was an important step in the first stage of the company's plans to eventually take the production capacity at the Pilbara operations to 420-million tons a year and global production to more than 600-million tons a year.

"Against a backdrop of strong demand and constrained supply, it is vital that we progress plans to deliver more iron-ore to market faster than before. That requires the strategic early acquisition of long-lead items, leveraging off existing industry leadership to reduce time to market of future expansions," commented Rio Tinto CE Tom Albanese.

"The huge number of major resource projects planned or under way in Western Australia has resulted in enormous competition for the supply of key materials and production slots. This ensures we will continue to lead the industry in completing projects in a timely, efficient manner," added Rio Tinto Iron Ore CE Sam Walsh.

Of the total, $518-million would be used to fund the early start of infrastructure works and the acquisition of long-lead items such as heavy mobile equipment, which was a key component for the expansion.

Rio Tinto stated that the early works would involve infrastructure at the Cape Lambert port, including the development of a heavy lift-off wharf facility.

Further, the investment also included $30-million for the advanced development of studies for an additional 8-million tons a year for the 52-million tons a year Yandicoogina mine in eastern Pilbara.

The balance of $149-million would be used for a study into a new iron-ore mine on the Western Turner Syncline, near the Tom Price mine, following the completion of a prefeasibility study.

Some $18-million would be used for a feasibility study into mine development, while $55-million would be used for long-lead items, such as heavy mobile equipment, and $76-million would be used for early development of a construction camp and associated infrastructure.

"The Western Turner Syncline has been identified as a key factor in our expansion. The ready accessibility to existing plant and infrastructure at Tom Price highlights a key advantage - expandability," said Walsh.

To meet first production in November 2010, early works were planned to start on the construction camp in November this year, establishing basic site facilities in preparation for the installation of the full construction camp.

Stage one infrastructure construction was scheduled to start in March 2009 and would continue until production started in late 2010.

The proposed mine would eventually ramp up to a capacity of 29-million tons a year, and feed into an existing Tom Price processing plant. Production would start in the fourth quarter of 2010.

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