Iron Ore Wars: Rio Doubles Down In Pilbara Mine Expansion

Rio Tinto is thumbing its nose at the weak iron ore price and pushing ahead with the expansion of operations in the Pilbara, according to the SMH this morning.

It is a plan which fits with a clear message from the big global miners that they are not worried about the crash in iron prices over the past 12 months. Rather, in what seems to be a clear play to drive higher cost producers out of the market and thus dominate iron ore in the decades ahead, they are actively adding capacity and keeping supply in the market.

It is a defiant push for market share that the ACCC would likely look at were it in a retail or domestic market but it is a strategy that management clearly sees as paying strong long-term dividends.

Quoting documents submitted to the Federal Government, the SMH says RIO said:

The proposed action is a large-scale iron ore mining project, with an estimated operational mine life of approximately 16 years. Subject to obtaining all relevant internal and external approvals, construction for the project is scheduled to commence in 2016. Production is scheduled to commence in 2017.

The project is centred on substantial iron ore deposits in the Hamersley Ranges and is anticipated to make a significant contribution to Rio Tinto’s iron ore exports over the next few decades.

December iron ore futures rallied overnight to $77.57 a tonne but they are still down more than $40 a tonne from the highs of the past year.

You can read more here

Iron Ore 62% Fe December Futures –

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at