13/01/2009 - 11:51

Rio defers WA automated train project

13/01/2009 - 11:51

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Rio Tinto has postponed its $547 million automated train operation in Western Australia and suspended a $236 million underground mine development in New South Wales amid the gobal economic downturn.

Rio Tinto has postponed its $547 million automated train operation in Western Australia and suspended a $236 million underground mine development in New South Wales amid the gobal economic downturn.

The company has approved the $US317 million ($A547 million) automated train project in July 2008, which is designed to bring greater efficiency to Rio Tinto's iron ore operations in the Pilbara.

The program was expected to be implemented in 2012.

"Substantial progress has been made towards implementation, with the trials proving successful, and the programme's momentum can be easily renewed when circumstances permit," Rio Tinto Iron Ore chief executive Sam Walsh said.

"Rio Tinto maintains its commitment to applying technology and innovation to improve efficiency and create shareholder value.

"Postponing the ATO program will help refocus resources to assist the advancement of automated truck haulage and drill and blast operations, remote mine operation and other key aspects of Rio Tinto's vision for the 'Mine of The Future'."

Over the past four weeks, Rio Tinto has deferred part of the underground expansion of its Argyle diamond mine in WA, reduced output from the Kestrel coking coal mine in Queensland by 15 per cent and postponed a $US2.15 billion expansion to its Corumba iron ore project in Brazil.

Meantime, the suspension of the underground mine at Rio's Northparkes operation in NSW will cost 346 jobs.

Twenty-six staff will be made redundant and 320 contractors will have their contracts finalised.

Commodity prices have sunk amid the global economic crisis as demand has slowed, with many producers forced to cut output and shed jobs to remain competitive.

The E48 underground mine project was expected to be completed by May and was designed to extend the life of the Northparkes copper mine out to 2016.

Rio has previously said it intends to reduce capital expenditure by up to $US5 billion ($A7.37 billion) this calendar year to help reduce about $US40 billion ($A58.94 billion) in debt incurred through the takeover of aluminium producer Alcan Inc.

The miner will axe about 14,000 jobs worldwide and expand its asset sales to reduce its debt position by $US10 billion ($A14.74 billion) by the end of this year.

Rio Tinto shares dropped 95 cents, or 2.3 per cent, to close at $40.35.

The company releases it production report for the December quarter on Thursday.

Elsewhere, the economic turmoil has claimed another scalp with Xstrata Zinc shelving a crusher upgrade and placing its Handlebar Hill operation in Mt Isa on care and maintenance.

The action will result in 89 contractors and 60 Xstrata Zinc personnel losing their jobs when Handlebar Hill is put on care and maintenance on February 12.

 

 

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