Capital and major evaluation projects
Capital expenditure for 2010 is expected to be at least US$5 billion with potential for a further US$1 billion for new investments. The focus for 2010 will be on the following capital projects:
| Capital project Rio Tinto share 100% unless stated US$ billion |
Approved project funding US $bn | Estimated capital spend in 2010 US $bn | Status / milestones |
|---|---|---|---|
| Iron ore – sustaining and expansion of Pilbara iron ore mines and infrastructure capacity beyond 220mtpa | 3.6 | 1.1 | Expansion of Hope Downs from 22mtpa to 30mtpa (US$350 million on 100% basis – Rio Tinto share is 50%) was completed during the first half of 2009. Work progressed on or ahead of schedule on the Mesa A and Brockman 4 mines. Mesa A came onstream in early February 2010 and Brockman 4 is expected to commence production in the second quarter of 2010. |
| Alumina – expansion of Yarwun alumina refinery from 1.4 to 3.4mtpa | 1.8 | 0.3 | Work has been slowed in response to market demand. The change to the construction schedule will result in a completion date in the fourth quarter of 2012. |
| Aluminium – construction of a new 225MW turbine at the Shipshaw power station in Saguenay, Quebec, Canada | 0.2 | 0.1 | Approved in October 2008, the project remains on budget and on schedule to be completed in December 2012. |
| Aluminium – modernisation of the Kitimat smelter in British Columbia, Canada | 0.5 | 0.1 | The project timing has been slowed. Intensive value improvement exercise exploring all options for reducing cost, and optimising project capital expenditures and returns. |
| Aluminium – AP50 pilot plant in Saguenay, Quebec, Canada | 0.4 | 0.1 | The project has been slowed. Construction of the electrical substation to be completed along with site preparation for potrooms and foundation of the busbars room. |
| Coking coal – Kestrel (Rio Tinto share 80%) extension and expansion | 1.0 | 0.4 | The project continues to target scheduled production of coal in 2012. |
| Thermal coal – Clermont (Rio Tinto 50.1%) replacement of Blair Athol | 1.3 | 0.2 | The project remains on track with first coal expected in the first quarter of 2010, ramping up to full capacity of 12.2mtpa by 2013. |
| Diamonds – Argyle underground development, extending life to 2018 | 1.5 | 0.1 | The project has been slowed to critical development activities. The project continues through 2010 and is being reviewed to determine the appropriate ramp-up timing. |
| Diamonds – Diavik (Rio Tinto 60%) underground development | 0.8 | – | The project has been largely completed with first production expected in early 2010 |
Sustaining capital expenditure for 2010 is estimated to be US$2.1 billion (Rio Tinto funded). In addition to these capital projects, the Group will continue to fund a number of major evaluation projects in 2010. Studies will continue into the step change expansion of iron ore production capacity in the Pilbara to 330 million tonnes per annum by 2015. Detailed design and engineering work of the Cape Lambert port expansion are scheduled to be completed by the end of 2010. Other major evaluation projects include the Simandou iron ore project and the La Granja and Resolution copper projects.