Rio Tinto is predicting bumper economic returns from its $441 million investment in the Silvergrass iron ore mine in the Pilbara.
The mine, which will create 500 construction jobs and 25 ongoing jobs, received WA State Government approval today.
State Development Minister Bill Marmion said Silvergrass would allow Rio Tinto to sustain the quality and quantity of their iron ore exports from the Pilbara.
“The expansion provides a significant boost to the Western Australian resources sector and shows our State continues to be an attractive place for large-scale investment,” he said.
Rio Tinto approved the development of the mine on August 2, subject to the approval received today from the State Government.
Rio Tinto chief executive Jean-Sébastien Jacques said the project was one of the most value-adding across the mining industry.
Rio Tinto said in a media release that the company expected the mine to repay their investment within three years and achieve a rate of return of more than 100%.
The approval comes amid a high-profile disagreement over taxes between the WA iron ore industry and the leader of the junior partner in the State’s coalition government, the National Party.
WA National Party WA leader Brendon Grylls wants to increased the taxes paid by the State’s iron ore industry.
The National Party on their website said: “If it is acceptable for the Government to ask families and businesses to pay increased State fees and charges, then asking the miners to do the same is not discriminatory.”
Jacques told The West Australian in late August that Grylls’ plan was the company’s number one global risk.
“The WA Nationals’ plan to add a new layer of iron ore taxation on top of royalties and company tax puts the achievements of the past 50 years at risk and jeopardises future investment in this state,” he said.
Silvergrass is located about 70 km north-west of Tom Price. The project will add 10 million tonnes per year to Rio Tinto’s iron ore production. As part of the project, a nine km conveyor will replace road haulage for the company’s mines in the vicinity of Silvergrass.