Rio Tinto moves on $3.5b Koodaideri mine

Rio Tinto will develop its most technologically advanced mine following the full approval of a $3.5 billion investment in the Koodaideri iron ore mine in Western Australia.

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 166km 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 per cent to around 38 per cent. It is expected to deliver an internal rate of return of 20 per cent 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 utilise an increased level of automation and digitisation, 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.

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.

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.

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. 

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, and
  • numerous data analytics capabilities and control loops to optimise production and reduce downtime.