Sam Walsh, head of the miner’s Australia-based iron ore division, said: “It is a $2bn project. We expect to ramp up quickly to 15m tonnes per year.”
Total foreign direct investment (FDI) from Australia between April 2000 to December 2011 stood at $486.5m, just 0.3 per cent of the country’s total FDI flows, according to trade ministry data.
The large investment will allow Rio Tinto to supply Indian and overseas clients.
India’s mining companies have found it difficult to expand to keep pace with rising demand, hampered by opposition from displaced locals, stringent environmental rules and a slow process for getting approvals.
“We will bring the technology and environment safety system and we will obviously be using the local people in the project,” said Walsh, when asked if he was confident of the project considering the various regulatory issues in the sector in India.
The country’s top court had banned iron ore mining in Karnataka citing environmental degradation and illegal mining.