Rio Tinto has announced plans to invest $338m to develop the Silvergrass mine in Pilbara iron ore operations in Western Australia.

The brownfield expansion of the mine is a key element in maintaining the company’s Pilbara blend, and delivers incremental tonnage, as well as lower unit costs.

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The investment in Silvergrass will add ten million tonnes of capacity and lower mine operating costs by replacing road haulage with a better conveyor system that links the mine operations to Rio Tinto’s existing processing plant at Nammuldi.

"The investment in Silvergrass will add ten million tonnes of capacity and lower mine operating costs by replacing road haulage with a better conveyor system."

Rio Tinto chief executive J-S Jacques said: “The additional low-phosphorus tonnes that Silvergrass delivers will sustain the long-term viability of our Pilbara blend, ensuring continued premium pricing, whilst also lowering our operating costs through infrastructure improvements.”

The final stage of the development, which is subject to securing necessary approvals from the West Australian Government, will see the replacement of the road haulage.

This haulage is used in the NIT projects with a primary crusher and a 9km conveyor to connect the Silvergrass mining area to the existing processing facilities at the company’s Nammuldi operations.

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Located next to the company’s Nammuldi mine, the Silvergrass satellite deposit is part of the Greater Nammuldi precinct, which is about 70km north-west of Tom Price.

The low-phosphorus Marra Mamba ore from the Silvergrass mining operations is treated at the Greater Nammuldi processing plant and blended into Rio Tinto’s Pilbara blend product.

Separately, Rio Tinto reported underlying earnings of $1.6bn, against a backdrop of continued volatility and weak commodity prices.

Jacques further added: “With our strong operating cash flows, tight control over capital expenditure and progress on divestments, the balance sheet remains robust.”