UK-Australian resources firm Rio Tinto and Australian producer Hancock Prospecting have invested $1.6bn into the Hope Downs iron ore project, supporting Rio's plan to maintain Western Australia (WA) ore grades and production levels as older mines close.
The companies will build two new iron ore pits at the mine, increasing its capacity by 31mn t/yr, Rio Tinto said on 24 June. Australian federal and WA state authorities have both approved the development, it added.
Rio Tinto's Hope Downs expansion is one of many projects it is working on. The company crushed its first load of iron ore at the 25mn t/yr Western Range mine in March. It is also developing the 40mn t/yr Rhodes Ridge project and the 34mn t/yr Brockman mine expansion, both of which will come on line by 2030.
The expansions will boost the company's production capacity by 130mn t/yr over time. But this will go towards offsetting production declines from older mines and maintaining ore grades. Rio Tinto expects its WA production capacity to hover between 345mn t/yr and 360mn t/yr in the medium term, up from recent levels of around 325mn-335mn t/yr.
The company recently adjusted the iron content of its Pilbara Blend Fines iron ore — which comes exclusively from WA — from 61.6pc Fe to 60.8pc Fe. It sold its first batch of the new grade on 13 May.
Hope Down's extension likely has 185mn t of 60.7pc Fe ore and 70mn t of 59.7pc Fe ore, according to inferred estimate.
Argus launched an iron ore fines 61pc Fe ICX® cfr Qingdao assessment on 2 June. It stood at $90.05/t on 23 June, below Argus' iron ore fines 62pc Fe ICX cfr Qingdao price of $92.65/t.
