Anglo-Australian mining company Rio Tinto PLC will invest $475 million as part of a project to increase its iron-ore production capacity in Canada by 50 percent.
The investment in The Iron Co. of Canada, in which Rio Tinto holds a majority stake, aims to boost iron-ore concentrate production in Canada to 22 million metric tons per year by 2011, Rio Tinto said Tuesday. Iron Co. of Canada is the nation's largest iron-ore producer.
"The iron ore market is as tight as it has ever been and our sustained and substantial reinvestment in our operations in Canada and worldwide demonstrates the confidence we have in that market," Rio Tinto Chairman Sam Walsh said.
Work begins immediately to expand mining and processing facilities in Labrador West and increase railway capacity to port facilities in Sept-Iles, Quebec, Rio Tinto said.
Iron Co. of Canada will buy new mining equipment as well as install a crusher station in the mine and autogenous grinding mill in the concentrator as well as an overland conveyor to link them. Also, new locomotives and rail cars will be purchased.
Shares of Rio Tinto rose $6.07 to $435.45 in afternoon trading.
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