Rio Tinto has announced plans to spend over half a billion dollars on exploration and other activities for its upcoming anchor iron ore mine in the Pilbara region, ensuring its significance for decades to come.
In a statement released on Tuesday, Rio disclosed its approval for a $US77 million (over $A115 million) pre-feasibility study for the Rhodes Ridge project. This project, if it meets all requirements, will serve as the foundation for Rio's iron ore operations in the area starting from the early 2030s.
Rio emphasised that Rhodes Ridge is one of the world's premier undeveloped iron ore deposits and anticipates completing the pre-feasibility study by the end of 2025. Initial production from the project is slated for the end of the decade.
This recent study builds upon a prior "order of magnitude" study, which suggested an initial capacity of up to 40 million tonnes per year, valued at over $US5 billion annually in present-day prices.
Simon Trott, Head of Rio Tinto's iron ore business, stated, "Longer term, the resource could support a world-class mining hub with a potential capacity of more than 100 million tons of high-quality iron ore annually."
Rio Tinto is planning to allocate more than $A400 million for exploration between 2024 and 2028 as part of the ongoing study phases.
The research conducted so far indicates a phased development, with the initial hub likely to be located in the northern part of the project, adjacent to existing rail infrastructure.
Last year, Rio Tinto (50%) and Wright Prospecting Pty Ltd (50%) agreed to modernise their joint venture, which covers the Rhodes Ridge project situated 40 kilometers northwest of Newman.
Rhodes Ridge boasts 6.8 billion tonnes of ore at an average grade of 61.6% Fe, including 5.3 billion tonnes at 62.2% Fe and 0.6 billion tonnes at 63.9% Fe. It is a high-grade deposit that, when fully operational, will allow Rio to maintain its global iron ore pricing brand, Pilbara fines, a 62% Fe product with low impurities.
Simon Trott, Chief Executive of Rio Tinto Iron Ore, expressed the company's commitment to collaborating closely with the Traditional Owners, the Nyiyaparli and Ngarlawangga People, as they progress with the project.
The joint venture will make use of Rio Tinto's existing rail, port, and power infrastructure, including the planned installation of renewable power assets in the Pilbara. This means that the project will be cost-effective to bring into production with a minimal capital expenditure.