Rio Tinto approves $ 2.6 bn investment in Koodaideri iron ore mine

Rio Tinto is to develop its most technologically advanced mine following the full approval of a $ 2.6 bn investment in the Koodaideri iron ore mine in Western Australia.

Koodaideri will deliver a new production hub for Rio Tinto’s world-class iron ore business in the Pilbara, incorporating a processing plant and infrastructure including a 166-kilometre rail line connecting the mine to the existing network. Construction will start next year with first production expected in late 2021. Once complete, the mine will have an annual capacity of 43 mill. t, underpinning production of the Pilbara Blend, Rio Tinto’s flagship iron ore product. Koodaideri Phase 1 will help sustain Rio Tinto’s existing production capacity by replacing depletion elsewhere in the system. The project will increase the higher-value lump component of the Pilbara Blend, subject to market conditions, from the current average of about 35 % to around 38 %. It is expected to deliver an internal rate of return of 20 % and capital intensity of around $ 60 per tonne of annual capacity, highly competitive for a new mine considering the additional infrastructure of rail spur, airport, camp and road access required. The operation has been designed to utilise an increased level of automation and digitisation, helping to deliver a safer and more productive mine which is expected to be Rio Tinto’s lowest cost contributor to its industry benchmark Pilbara Blend product. Through the use of digital assets, advanced data analytics and automation, Rio Tinto expects to significantly enhance the operation and maintenance of this new mine.

The investment is underpinned by an ore body of high-quality Brockman ore more than 20 km long and 3 km wide. In addition to mine infrastructure, an airport, mine support facilities and accommodation for employees will be built. Throughout the construction period Rio Tinto expects to employ over 2000 people with 600 permanent roles created once the mine is operational. Koodaideri will feature technology already in use across Rio Tinto, such as autonomous trucks, trains and drills, and implement systems connecting all components of the mining value chain for the first time. The development will consolidate everything Rio Tinto has learned from its studies into finding advanced ways to extract minerals while reducing environmental impacts and improving safety, known as the Mine of the FutureTM programme. Koodaideri has more than 70 innovations in scope including: a digital replica of the processing plant, accessible in real time by workers in the field; fully integrated mine automation and simulation systems; advanced automation including an automated workshop, and, numerous data analytics capabilities and control loops to optimise production and reduce downtime. Koodaideri, 100 % owned by Rio Tinto, is located approximately 35 km north-west of Rio Tinto’s Yandicoogina mine site, and about 110 km from the town of Newman in the Pilbara region of Western Australia.

Press Release, November 29, 2018