Rio Tinto and its partners have agreed to spend $US5.2 billion expanding their massive iron ore operations in the Pilbara, with Rio saying the demand outlook is positve and that competing suppliers are running into trouble with their projects.
The world's second largest iron ore producer also said mining in the Pilbara presented long-term growth prospects.
That's despite recent comments from rival iron ore miner BHP Billiton about uncertainty created by falling commodity prices, slowing growth in China and economic woes in Europe and the United States.
Rio's share of the new investment announced today is $US3.7 billion.
"We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario," Rio Tinto chief executive Tom Albanese said in a statement.
"Today's announcement is in line with our long-held strategy of investing in and operating long-life, low-cost, tier one assets, and consistent with our view of the economic outlook."
Rio and its partners wil spend $US3.5 billion over the next four years on port and rail developments that will expand its production capacity in the Pilbara to 353 million tonnes per annum from 2015.
A further $US1.7 billion will be spent to extend the life of the Yandicoogina mine in the Pilbara to 2021 and expand its capacity by six million tonnes per annum.
Rio has also committed $US501 million ($US1 billion on a 100% basis) to develop infrastructure at the Simandou iron ore project in Guinea.
Rio Tinto iron ore chief executive Sam Walsh said the company continued to see positive prospects for the steelmaking ingredient in the short to medium term, driven by ongoing demand from China.
"We continue to forecast that annual Chinese steel production will grow from its current level of around 700 million tonnes to around one billion tonnes a year towards 2030," Mr Walsh said in a statement.
"This demand growth is coupled with an increasingly challenged supply response, as several high-profile competitor projects have recenly been either delayed or postponed."
Rio shares were up 86 cents, or 1.5 per cent, at $57.63 at 1548 AEST.