In a presentation to investors and analysts, Australian iron ore giant Rio Tinto has stated that it plans to spend around US$2.2 billion on replacement iron ore mines in Pilbara, Western Australia, over the next three years (2018-20), including initial spending on the development of the Koodaideri, West Angelas and Robe Valley mines. Construction work for the Koodaideri iron ore mine, which will be a new production hub, is scheduled to commence in 2019, with the first shipment expected in 2021.
Chris Salisbury, Rio Tinto Iron Ore chief executive, stated that the company’s strategy is to optimize its Pilbara assets, adding that it will continue to maximize free cash flow, which was $7.3 billion in 2017, by pursuing a value-over-volume approach, built on a portfolio of world-class assets.
According to Mr. Salisbury, removing the bottleneck in the company’s rail operations and increasing flexibility remain a key priority and the company will continue to optimize the system to provide the flexibility to respond to market conditions.