The Hope Downs joint venture, which is co-owned by mining giant Rio Tinto and Hope Downs Iron Ore, has approved a $71-million feasibility study into expanding the Hope Downs 4 project, in Australia.

The project formed part of Rio Tinto's plan to produce 320-million tons of iron ore a year from its Pilbara operations by 2012, the company said.

The company, which is defending itself against an unsolicited takeover approach from rival BHP Billiton, recently announced plans to boost its iron-ore production at Pilbara, in Western Australia, including by building two new mines.

The company aims to increase its total iron-ore output to upwards of 600-million tons a year.

“The Hope Downs 4 deposit offers excellent potential as part of our extension into the east Pilbara region, especially as we ramp up towards 320-million tons a year capacity over the next five years,” said Rio Tinto iron ore CE Sam Walsh.

Rio Tinto said earlier this week that it plans to sell as much as 15-million tons of iron ore, a key ingredient in the manufacture of steel, on the higher-priced spot market for the ferrous metal in 2008.

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