Rio Tinto's Yandicoogina Mine Records 50 Million Tons of Iron Ore Production in 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Yandicoogina iron ore mine in Western Australia, which belongs to Rio Tinto Limited (ASX:RIO) (Melbourne, Australia), the second-largest global producer of iron ore, has for the first time recorded a yearly production of more than 50 million tons. The breakthrough in production comes despite the prevalent economic slump and flood-ravaged railway operations in 2009.

Yandicoogina, in a mineral-rich channel in Pilbara, which is close to Newman, commenced operations in 1998, and achieved a production target of 10.7 million tons in the first year. The mine's production figures, which were averaging at 40 to 45 tons per year until April last year, have seen a sudden increase. However, output from the facility has been steadily on the rise since expansion operations were performed at the mines in 2007-08. Yandicoogina is just 2 million tons away from its full potential, with the nameplate capacity of the mines being 52 million tons per year. Rio Tinto's global output for 2009 stood at about 215 million tons, as compared to 170 million tons in 2008.

Initial mining operations in an area containing more than 300 million tons of high-grade pisolite ore, with a planned output of 5 million to 10 million tons per year, were reported to be sufficient to drive mining operations for about 20 years. However, Yandicoogina's potential reserves have been estimated to hold more than 1 billion tons of ore.

The mines in the region generally function based on open-pit mining methods, with two variants of fine-grade ore being produced from the Yandicoogina mines: Pisolite ore HG, with about 58.5% of iron content, and Process Product, with 58.2% of iron. The output is marketed as a separate product in the Asian markets, alongside the product range from Robe River mine and the Pilbara blend. The pisolite ore from the mines is in high demand in the steel sector, especially due to its low impurity levels, easy melting property, and sinter-efficient qualities, which play a major role while smelting finely blended ore. Studies have revealed that in the right proportion of about 10% to 40% and under increased moisture mix, pisolite ore helps to increase the productivity of the smelting process.

The iron ore mines in the Pilbara region have been mainly operated by Rio Tinto and BHP Billiton Limited (NYSE:BHP) (Melbourne, Australia). However, growing steel demand in China has caused the country to venture for stakes in the iron ore mines of Western Australia. Funded by the state coffers, Chinese steel firms are planning to strengthen their presence in Australia. In a most recent development last December, Rio Tinto and BHP Billiton have come together for a joint venture worth $116 billion in iron ore mining in Pilbara to counter Chinese infringement in the region. However, it remains to be seen if the steel regulation community across the globe will clear the deal, allowing Rio and BHP to continue their monopoly in the region.

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