British-Australian miner Rio Tinto (ASX:RIO) announced on Monday it will invest US$1.6 billion to develop the Hope Downs 4 iron ore project in Western Australia and link with Rio Tinto's existing rail, power and port infrastructure in the Pilbara.

The resource giant and its joint venture participant, Hope Downs Iron Ore Pty Ltd, will proceed with the development of the mine at an estimated capital cost of US$1.2 billion (Rio Tinto share US$607 million), to be shared equally by the JV partners, according to a company statement released today.

The new open-cut mine will have an annual capacity of 15 million tonnes of high-quality iron ore, with first production anticipated in 2013.

The project is in the south eastern Pilbara, 30 kilometres north of Newman, and will include a permanent staff village for more than 600 personnel, mine dewatering, an open cut shovel and truck mining fleet and wet ore processing infrastructure.

Rio Tinto will commit another US$425 million to fully cover the capital cost of the rail, rolling stock and power infrastructure owned by Rio Tinto required for this development. The 52-kilometre spur line connecting to the Lang Hancock Railway will link the mine to Rio Tinto's existing rail and port infrastructure.

Construction is expected to begin in early 2011, subject to securing necessary regulatory and other approvals.