Expansion to cement Rio's position as No1 in iron ore
RIO TINTO will spend a further $US3.4 billion ($3.15 billion) cementing its position as Australia's biggest producer of iron ore.
RIO TINTO will spend a further $US3.4 billion ($3.15 billion) cementing its position as Australia's biggest producer of iron ore.Expansion funding for the company's most lucrative division came as Rio's locally listed shares rose strongly on the ASX ahead of tonight's full-year financial results.A sharp afternoon rally came amid speculation Rio may do better than analysts predictions of a $US15.3 billion profit for the year to December 31.The 75? rise to $71.76 was also aided by speculation the company may seek to differentiate itself from BHP Billiton today by offering another round of share buybacks.Tonight's results will again be dominated by Rio's iron ore business, which has in recent times contributed close to three-quarters of the company's profits.That exposure will only increase under the $US3.4 billion plan, which will first raise Rio's iron ore exports to 283 million tonnes per year and will help start preparations for a jump to 353 million tonnes a year.A portion of the money had been previously announced in October 2010, but the bulk of it - particularly a $US2.2 billion spend on extending the life of the Nammuld mine - was newly announced yesterday.The money will also cover preparations for expansion at Rio's Cape Lambert port and rail complex.It is owned by Robe River Iron Associates, a Rio Tinto-controlled joint venture with Japanese firms Mitsui Iron, Nippon Steel and Sumimoto Metal, and the spending plan is subject to further approvals.Rio's Iron Ore boss, Sam Walsh, said production should rise from the current 220 million tonnes a year to 283 million tonnes by late next year. A rise to 353 million tonnes is scheduled to be finished by June 2015.Rio also announced yesterday that John Varley would join its board as a senior independent director of both its local and London-listed stocks.