Rio Tinto iron ore expansion cheaper than expected

Rio Tinto's existing plan to grow its iron ore production to 360m tonnes a year will cost more than $3bn (£1.8bn) less than it had previously thought, the mining giant said today. It said that combining its brownfield expansions and securing further low-cost productivity gains will feed the expanded infrastructure its currently developing.

To further its brownfield expansion, Anglo-Austrialian Rio Tinto says it's approved a $400m plan to further grow its iron ore business in Western Australia. The capital expenditure will be used for plant equipment and extra heavy machinery at mining sites across the Pilbara (pictured).

The ongoing scheme is driven by a desire to "enjoy the best returns in the industry" said iron ore chief executive Andrew Harding. Demand, he added, is being fuelled by the developing world, particularly China, through urbanisation and income growth.

The majority of the low-cost growth will be delivered over the next two years and will see mine production of more than 300m tonnes in 2015, with it "at a significantly lower capital cost per tonne than originally planned."

The company says it is currently planning development of the greenfield Silvergrass mine, to secure further low-cost gains in productivity like those delivered by its Mine of the Future programme.