By Rebecca Keenan - Jun 20, 2012
Bloomberg
Rio Tinto Group, the world’s second- largest exporter of iron ore, has committed $4.2 billion to expanding its mines in Australia’s Pilbara and the Simandou operation in Guinea as Chinese demand grows.
It will spend $3.7 billion building new port berths and extending railways in Western Australia as part of a plan to boost output to 353 million metric tons a year by 2015, the London-based company said in a statement today. It also allocated $501 million to building rail and port at its development project in Guinea.
Rio, which ranks behind Brazil’s Vale SA (VALE3) for iron ore exports, is spending at least $15.6 billion expanding mines and ports. China, the world’s largest steel producer, will boost outputs by 43 percent to one billion tons by 2030 as it continues to urbanize, according to Rio.
“We continue to see positive prospects for medium-to long- term iron ore demand driven by ongoing growth in Chinese consumption,” Sam Walsh, chief executive officer of Rio’s iron ore unit, said in the statement.
Rio gained 1.5 percent to A$57.61 at 3:16 p.m. local time in Sydney, paring its decline for the year to 4.5 percent. The benchmark index was 0.2 percent higher.
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