Driven to take advantage of current ore prices and be ahead of its peers, Rio Tinto Ltd (ASX: RIO) and its partners have decided to hasten the development in its project in the Pilbara Region in Western Australia by earmarking some US$676 million of funding for early works and procurement.

The said investment will increase its production capacity to 333 million tonnes a year (Mt/a), which will now be reached in the first half of 2015 or six months earlier than planned1.

This is part of a five-year programme started in 2010 to increase capacity in the Pilbara by 50 percent, Rio Tinto said in an issued statement.

The US$676 million (Rio Tinto share US$350 million) will be used to bring forward engineering work for the longest lead-time components of port and rail infrastructure, without increasing the overall cost of the expansion programme.

Rio Tinto Iron Ore and Australia , CEO Sam Walsh said: "Thanks to this faster pace of expansion we will be bringing extra tonnes to market earlier. The demand outlook continues to be strong with supply lagging elsewhere in the industry and we are seeing new supplies proving slower to materialise than predicted. We are taking the opportunity to bring forward the next phase of our major capacity expansion to reap the benefits early and at no additional cost".

The early port works principally comprise the assembly of additional construction accommodation, the continuation of dredging, marine works and stockyard earth works contractors and the procurement of key equipment. The rail-related funding will enable early engineering and accelerated procurement of long-lead items such as rail plant.

Studies will continue through this year to determine the best mine development path to meet this schedule, as will studies for supporting infrastructure such as utilities, fuel and accommodation.

Rio Tinto's integrated operations expansion to 333 Mt/a is being achieved through this sequence:
• 225 Mt/a by end of Q1 2011 - Dampier port systems efficiencies (completed)
• 230 Mt/a by end of Q1 2012 - Dampier port incremental (in implementation)
• 283 Mt/a by end of H2 2013 - Cape Lambert B 1st 53 Mt/a increment (in implementation)
• 333 Mt/a in H1 2015 - Cape Lambert B 2nd 50 Mt/a increment (early works approved)

Listed in Australia's ASX as Rio Tinto Ltd and in London's and NYSE's Rio Tinto Plc, the UK-based company's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.