Rio to Spend $2.15 Billion on Brazil Iron Ore Mine

July 29, 2008

July 29th (Bloomberg) – Rio Tinto Group, the world’s second- largest iron ore producer, plans to spend $2.15 billion raising output of the steelmaking raw material sixfold at its Corumba mine in Brazil.

Production will rise to 12.8 million metric tons a year, from 2 million tons currently, London-based Rio said today in a statement. The company will conduct a study, which will be completed next year, into expanding to 23.2 million tons.

Rio, which also operates mines in Australia and Canada, is seeking to triple output to 600 million tons in a bid to repel a hostile $148 billion offer from BHP Billiton Ltd. Contract iron ore prices rose to a record this year on soaring steel demand in emerging economies including China, the largest consumer.

Output from the enlarged Brazilian mine is expected to commence in the fourth quarter of 2010, Rio said. Two ports will be built, including one in neighboring Uruguay. The ore from the mine will be moved along the River Paraguay before being loaded onto ships.

Rio produced 179 million tons of iron ore last year. Corumba will supplement output from its Pilbara mines in Australia, the 59 percent owned Iron Ore Co. of Canada and the Simandou project in Guinea.

Brazil’s Cia. Vale do Rio Doce is the world’s biggest iron- ore producer.

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