Rio Tinto opens $3.1b Western Range iron ore mine as part of $20b WA cash splash to boost Pilbara ore quality

Mining giant Rio Tinto has raised the curtain on its next big iron ore money spinner in the Pilbara, opening a new $3 billion mine that is seen as ensuring the region remains a key producer of WA’s biggest export earner. The Western Range mine, near Paraburdoo, a partnership with Chinese steelmaker China Baowu, is aimed at sustaining Rio Tinto’s production of iron ore and boosting the quality of its shipments of the steel-making ingredient. Rio and other iron ore producers in the Pilbara are mining ageing deposits that are turning out lower grade iron ore, potentially threatening profits and the mining royalties paid to the WA Government. Outgoing Rio Tinto chief executive Jakob Stausholm told guests at Friday’s official mine opening that Western Range was an important step in the group’s extension plans in the Pilbara and would ensure the longevity of the Paraburdoo mining hub, which began operating in 1972. “Partnering with Baowu ensures our biggest customer directly benefits with a consistent, dedicated supply of Rio Tinto’s world leading Pilbara Blend iron ore,” Mr Stausholm said. Premier Roger Cook said Western Range would play “a critical role in supporting both WA’s and the nation’s prosperity”, while ensuring WA continued “as a secure, attractive place to invest”. “I want WA to be a global leader in investment attraction, industry facilitation and regulation,” he said. Western Range — owned 54 per cent by Rio and 46 per cent by China Baowu — will turn out up to 25 million tonnes a year, helping the anglo-Australian company maintain its yearly production of iron ore above 300 million tonnes. It is part of Rio’s broader plan to build a new mine every year until 2030 to improve its iron ore grades and close in on BHP’s lead as the most efficient operator in WA. Construction of Western Range took just over two years, with the project delivered on its $US2 billion ($3.1b) budget. Federal Minister Madeleine King said the new mine was testament to the strength of Australian mining’s relationships with China. “I’m absolutely confident in the iron ore industry of Western Australia, here in Paraburdoo ... and right across the Pilbara,” Ms King said. “It’s an extraordinarily strong industry (with) decades of high performance, always driving efficiencies and productivity within operations and providing jobs and livelihoods for many, many Western Australians and indeed for other workers in the country that come to live and work in WA.” At Rio’s annual general meeting last month, chairman Dominic Barton flagged a $20 billion spend on new mines, plant and equipment in the Pilbara over the next three years. The miner is making up for lost time after facing regulatory hurdles bringing new projects online in the immediate wake of the Juukan Gorge disaster five years ago. A dearth of new supply has made Rio increasingly reliant on extracting lower-grade ore in recent years, squeezing the company’s profit margins. Its next priority is its $US6.2b portion of the ultra high-grade Simandou mining complex in Guinea, where first ore is scheduled in the first half of next year. Then back in its Pilbara heartland, Rio plans to extend the Hope Downs, Nammuldi and Brockman mines while also bringing the massive Rhodes Ridge project to life by 2030. The already-blended Pilbara ore itself set to be further mixed with Simandou’s ore, before being sold to steel mills in China.