Rio Tinto planning new expansion of iron ore mining in Labrador

Rio Tinto iron ore production in Labrador could reach 50 million tons per year by 2015 if new development proceeds

British-Australian mining giant Rio Tinto intends to increase production at the Iron Ore Company of Canada site in western Labrador. Rio Tinto's president of international operations in iron ore, Alan Davies said that the company is working on a tentative plan to more than double production, from 23 million tons to 50 million tons.

The company announced a major expansion program, costing $435 million, to lift production from 4 million tons of concentrate to 23 million by 2012. Work will now start on a feasibility study for the latest project.

The expansion comes amid mounting global demand for iron ore, particularly from China and other Asian countries. In May, the world’s biggest steelmaker, ArcelorMittal, launched a $2.1-billion project to increase iron-ore production from its Quebec operations to 24 million tons by 2013. And last month, New Millennium Iron CEO Dean Journeaux forecast that companies in the Labrador Trough might reach a production rate of up to 150-million tons yearly over the next ten to 15 years.

If the new Rio Tinto project is deemed viable and is approved, the extra production will require a new concentrator, new rail lines for shipping and hundreds of new employees in Labrador City, which was effectively built as a company town in the early 1960s.

UK- and Australia-listed Rio Tinto owns 58.7% of IOC, with Japan’s Mitsubishi Corporation holding 26.2% and Labrador Iron Ore Royalty Income Fund owning the remaining 15.1% stake.