The Board of IOC has approved new investment of US$401 million (Rio Tinto share US$235 million) to increase its annual concentrate capacity by four million tonnes to 22 million tonnes by 2012.
The investment is the first stage of a three-stage expansion programme at IOC that could increase concentrate annual capacity to 26 million tonnes. It was initially approved in March 2008 but suspended later that year as the global financial crisis impacted markets worldwide.
IOC Chairman and Rio Tinto chief executive, Iron ore Sam Walsh said the decision highlighted the degree of confidence in growing demand for iron ore, the attractiveness of investing in Canada and the quality and potential of IOC's assets.
"Some uncertainty and potential volatility remain about global economic recovery, but global iron ore and steel markets have rebounded strongly and demand growth looks set to continue. This expansion programme is a significant step towards realising the full potential of our IOC operations. IOC's assets and high quality product, position us strongly for future iron ore demand growth in North America, Europe and Asia.
The revised total project cost for the first stage expansion, including costs spent prior to suspension, is US$497 million (Rio Tinto share US$292 million), a US$22 million increase on the original estimate.