London - Rio Tinto Group, the world’s second-biggest miner, approved an expansion of its annual iron ore output capacity to 360 million metric tons by 2017.
“We will deliver the expansion at an estimated capital cost of more than $3-billion below previous expectations,” Sam Walsh, chief executive officer of London-based Rio said on Thursday in a statement. “The majority of the low-cost growth will be delivered in the next two years with mine production of more than 330 million tons in 2015,” Rio said.
Rio, the world’s second-biggest exporter of the steelmaking raw material, is lifting iron ore output capacity to meet growing demand from China. Mining companies are seeking to cut costs after a decade-long boom in prices waned, crimping revenue.
Iron ore output capacity will rise by more than 60 million tons a year between 2014 and 2017 to 360 million tons, Rio said according to the statement.
Rio gained 0.2 percent to A$64.42 at the close of trading in Sydney.
Deutsche Bank AG estimated the 360 million ton mine expansion project to cost $5.2-billion, according to a September report. - Bloomberg