Rio Tinto to move ahead with $2.6bn Koodaideri iron ore mine in Pilbara

Mining giant Rio Tinto is all set to move ahead with the development of its 100% owned Koodaideri iron ore mine in Australia with an investment of A$3.5 billion ($2.6 billion) with an objective to draw 43 million tons of iron ore a year.

Koodaideri iron ore mine

The Koodaideri iron ore mine is located in Western Australia’s Pilbara region, about 35km north-west of Rio Tinto’s Yandicoogina mine site and around 110km from Newman.

Rio Tinto expects the Koodaideri iron ore project to support production of its flagship Pilbara Blend iron ore product.

Construction on the iron ore mine is slated to begin next year once it gets a final approval from Western Australia. The first production from the Rio Tinto iron ore mine is likely to be in late 2021.

The Koodaideri iron ore project will bring over 2,000 construction jobs and 600 permanent roles to handle its operations.

Rio Tinto will develop the Koodaideri iron ore mine in the Pilbara region with an investment of $2.6bn. Photo courtesy of Rio Tinto.

The Koodaideri iron ore project will become a new production hub for Rio Tinto’s iron ore operations in the Pilbara, courtesy of a new processing plant and infrastructure, including a 166km railway line that will serve as a link between the mine and the existing network of the company.

Rio Tinto plans to deploy digital assets, advanced data analytics and automation at the Koodaideri iron ore mine to make it its first intelligent mine in the Pilbara region and also to significantly improve its operation and maintenance. The iron ore mine will use autonomous trucks, trains and drills apart from implementing systems to connect each and every component of the mining value chain.

J-S Jacques – Rio Tinto chief executive, commenting on the Koodaideri iron ore mine, said: “Koodaideri is a game-changer for Rio Tinto. It will be the most technologically advanced mine we have ever built and sets a new benchmark for the industry in terms of the adoption of automation and the use of data to enhance safety and productivity.

“As we pursue our value over volume approach, targeted high quality investments such as Koodaideri will ensure we continue to deliver value for our shareholders and Australians.

“This further investment in our iron ore business is also a multi-billion dollar vote of confidence in Western Australia. The project will also deliver significant opportunities for local companies and we expect more than A$3 billion will be spent with Australian-based businesses, with opportunities for about A$2.5 billion of spending for Western Australian-based businesses during its development.”

The Koodaideri iron ore mine will be developed through a couple of phases. In the first phase, the iron ore mine will help maintain Rio Tinto’s present production capacity by replacing depletion elsewhere in the system. Depending on market conditions, the iron ore project will boost the current average lump component of Pilbara Blend to about 38% from the current average of nearly 35%.

The second phase of the Koodaideri iron ore mine, for which a final investment decision could be taken later on, will be used for ramping up the annual capacity from the Koodaideri production hub in excess of 70 million tons. A pre-feasibility study with a budget of $44m has been approved for this second phase of the Koodaideri iron ore project.