The world's third biggest miner Rio Tinto Monday said it would invest 991 million US dollars to boost production at a coal mine in north-eastern Australia to meet growing demand from Asia.
Rio said it planned to boost output from the Kestrel Mine in the Bowen Basin in central Queensland state from about 4.0 million tonnes of coal per year to an average of 5.7 million tonnes until 2031 to meet export demand.
The extension, which is subject to government approvals, would also prolong the life of the mine, Rio said in a statement. "This represents a further 20-year commitment to the Bowen Basin and is a strong vote of confidence in the Asian coal market," chief executive of Rio's energy division, Preston Chiaro, said. "The extension will enable us to tap into 112 million tonnes of high quality hard and semi-hard coking coal and thermal coal for export."
High quality metallurgical coal, vital to boost steel production, is in huge demand in rapidly industrialising Asia. Rio Tinto's Australian-based managing director of strategy, Doug Ritchie, said, the extension was one of a number of investment decisions aimed at fulfilling the miner's growth plans.
"We are entering into an unprecedented period of demand growth and Rio Tinto is well paced to meet this demand," he said. Rio Tinto is the target of an uninvited take-over offer from the world's biggest miner BHP Billiton which it has so far rejected. The merger proposal has met stiff opposition from steel mill customers particularly in China, who fear that the merger would give BHP Billiton too much pricing power in the iron ore market.