Rio Tinto drives toward increased iron ore production
The globe's second-largest miner of iron ore is investing $3.7 billion to enhance production by 25 percent within the next three years in Australia, according to Reuters.
Rio Tinto is aiming to boost output to 353 million tons by 2015. Trailing only Vale of Brazil, the mining services firm apparently is not concerned about projections of decreasing demand as well as projections of a glut in global supplies.
Rio Tinto presently operates its mines at a pace of 230 million tons per year. The service already was driving toward boosting production to 283 million tons.
The firm's board approved the expansion that is projected to cost roughly $5.2 billion. Approximately $1.5 billion is projected to derive from joint venture partners. The moves arrive as the sector is being pinched to reduce capital spending and send increased amounts of cash to shareholders who are edgy about the reduced pace of global growth.
Three-hundred fifty-three million tons would establish the firm's Australian mines as the source of almost 33 percent of the globe's iron ore trade.
"We are mindful of short-term uncertainties, and remain fully committed to a balanced approach to investment, while maintaining a single A credit rating and a progressive dividend policy," chief executive Tom Albanese with Rio Tinto said.
Mining firms consider iron ore gold and the Asian market is viewed as enormously fertile.
The Wall Street Journal reports Rio Tinto is particularly enthused about Chinese prospects for iron ore. The Asian nation is projected to increase to 1 billion tons per year as 2030 approaches. Production now totals roughly 700 million tons.