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10

Mining People Magazine

www.miningpeople.org

Koodaideri will deliver a new production hub for Rio Tinto’s

world-class iron ore business in the Pilbara,

incorporating a

processing plant and infrastructure including a 166-kilometre rail

line connecting the mine to the existing network. Construction

will start next year with first production expected in late 2021.

Once complete, the mine will have an annual capacity of 43

million tonnes, underpinning production of the Pilbara Blend,

Rio Tinto’s flagship iron ore product.

Koodaideri Phase 1 will help sustain Rio Tinto’s existing

production capacity by replacing depletion elsewhere in

the system. The project will increase the higher-value lump

component of the Pilbara Blend, subject to market conditions,

from the current average of about 35 percent to around 38

percent. It is expected to deliver an internal rate of return of

20 percent and capital intensity of around $60 per tonne of

annual capacity, highly competitive for a new mine considering

the additional infrastructure of rail spur, airport, camp and road

access required.

The operation has been designed to utilize an increased level

of automation and digitization, helping to deliver a safer and

more productive mine which is expected to be Rio Tinto’s lowest

cost contributor to its industry benchmark Pilbara Blend product.

Through the use of digital assets, advanced data analytics and

automation, Rio Tinto expects to significantly enhance the

operation and maintenance of this new mine.

Rio Tinto chief executive J-S Jacques said

“Koodaideri is a game-changer for Rio Tinto. It

will be the most technologically advanced mine

we have ever built and sets a new benchmark

for the industry in terms of the adoption of

automation and the use of data to enhance

safety and productivity.

“As we pursue our value over volume

approach, targeted high quality investments such as Koodaideri

will ensure we continue to deliver value for our shareholders

and Australians.

“This further investment in our iron ore business is also a multi-

billion dollar vote of confidence in Western Australia. The project

will also deliver significant opportunities for local companies and

we expect more than A$3 billion will be spent with Australian-

based businesses, with opportunities for about A$2.5 billion of

Rio Tinto Approves

Investment in

Koodaideri

Iron Ore Mine

Rio Tinto is to develop

its most technologically

advanced mine following the

full approval of a $2.6 billion

(A$3.5 billion) investment in

the Koodaideri iron ore mine

in Western Australia.

spending for Western Australian-based businesses during its

development.”

The investment is underpinned by an ore body of high-

quality Brockman ore more than 20 kilometres long and three

kilometres wide. In addition to mine infrastructure, an airport,

mine support facilities and accommodation for employees will

be built. Throughout the construction period Rio Tinto expects

to employ over 2,000 people with 600 permanent roles created

once the mine is operational.

Since completion of the pre-feasibility study in 2016, additional

capital has been included for productivity enhancements to

increase capacity to 43 million tonnes from the 40 million tonne

base case. The project scope was also broadened to incorporate

significant safety improvements and the development of

additional infrastructure such as an airport and site access

roads. Cost inflation for labor and materials also contributed to

the capital increase.

A $44 million pre-feasibility study into Koodaideri Phase 2 has

also been approved. The expansion could increase annual

capacity from the Koodaideri production hub to 70 million

tonnes and beyond. A final investment decision is subject to

study outcomes and Rio Tinto’s value over volume approach.

Technology & Innovation

Koodaideri will feature technology already in use across

Rio Tinto, such as autonomous trucks, trains and drills,

and implement systems connecting all components of the

mining value chain for the first time. The development will

consolidate everything Rio Tinto has learned from its studies

into finding advanced ways to extract minerals while reducing

environmental impacts and improving safety, known as the

Mine of the FutureTM programme.

Koodaideri has more than 70 innovations in scope including:

• a digital replica of the processing plant, accessible in real

time by workers in the field.

• fully integrated mine automation and simulation systems.

• advanced automation including an automated workshop.

• numerous data analytics capabilities and control loops to

optimize production and reduce downtime.