A $441 million expansion at Rio Tinto’s Nammuldi iron ore precinct in the Pilbara has been approved by the WA Government, adding a potential 10 million tonnes to the miner’s annual throughput in the region.
State development minister Bill Marmion said the Silvergrass iron ore project would create around 500 jobs during construction, and an additional 25 operational positions once the 10 million tonne per annum expansion is operational.
“Expanding production from Silvergrass will allow Rio Tinto to sustain the quality of their Pilbara blend product and maintain current production levels,” Marmion said.
“The expansion provides a significant boost to the Western Australian resources sector and shows our state continues to be an attractive place for large-scale investment.”
The approval from the state comes around a month after the Rio board itself approved the plan.
Rio said the brownfield expansion would have a pay back of less than three years.
“We are committed to disciplined capital allocation and the approval of the final phase of the Silvergrass development, which is one of the most value-accretive projects across the mining industry, delivers high-quality, low-cost growth that will underpin future returns to shareholders,” Rio boss J-S Jacques said.
“The additional low-phosphorus tonnes that Silvergrass delivers will sustain the long-term viability of our Pilbara blend, ensuring continued premium pricing, whilst also lowering our operating costs through infrastructure improvements.”
Silvergrass is a satellite iron ore deposit near Rio’s existing Nammuldi project, which is part of the miner’s significant Brockman mining area.
Ore from the region is transported via Rio’s private rail network to Dampier for export.