According to The Australian Financial Review, Rio Tinto is entering a phase of elevated spending on new and existing mines in Australia's iron ore heartland, warning investors its mines are becoming deeper, wetter and generally more expensive to run after half a century in operation.
China's demand for iron ore has been stronger than expected in 2019, and Rio warned that depletion of mines would occur swiftly, meaning new greenfield mines would need to be built and perhaps even new greenfield iron ore provinces with expensive infrastructure, such as railways.
Rio approved a $US2.6 billion spend on the first phase of the Koodaideri iron ore mine in Western Australia last year, but it said on Thursday that "sustaining" spending to maintain its existing mines would also be $US1.5 billion higher than expected over the next three years.
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