Rio Tinto to invest $518 mn in world's first automated heavy haul rail network

PERTH (Scrap Monster): Mining giant Rio Tinto (ASX: RIO, LSE: RIO, NYSE: RIO ) is continuing to invest in the Pilbara region of Western Australia, announcing on Monday a further $518-million investment on the world’s first automated long-distance heavy-haul rail network.

The first driverless trains would be launched in 2014, with the AutoHaul automated train programme scheduled for completion later this year.

AutoHaul is part of the automation component of Rio Tinto’s Mine of the Future initiative that also includes driverless trucks and autonomous drills. On its 1 500 km rail network, Rio currently runs 41 trains from mines to ports, comprising 148 locomotives and 9 400 iron-ore cars.

Automating train operations would allow the company to expand Pilbara production capacity without needing to make a substantial investment in additional trains, the miner said in a statement.

It will also drive productivity improvements, with greater flexibility in train scheduling and the removal of driver changeover times creating extra capacity in the rail network. Other benefits include more efficient fuel use, resulting in lower energy costs and a reduction of carbon dioxide emissions for each ton of iron ore produced.

Rio’s Australian and iron-ore chief Sam Walsh said that the company was leading the way in large-scale use of automation, with plans to deploy 150 driverless trucks and its plans for AutoHaul.

“Expanding Pilbara iron-ore production is a high-return and low-risk investment for Rio Tinto that will enhance shareholder value. Automation will help us meet our expansion targets in a safe, more efficient and cost-effective way.”

Walsh said that automation also helped the company address the significant skills shortage facing the industry, providing a valuable opportunity to improve productivity.

“However, as we expand our business we will see an overall increase in job numbers and this will provide new opportunities in the rail division and elsewhere. As always, we will engage directly with those affected as we gradually make the transition to automation over the next three years.”

Earlier this month, Rio announced that it would be spending a further $3.5-billion in iron-ore investments in the Pilbara, with some $2.2-billion being invested to extend the life of the Nammuldi iron-ore mine, increasing the miner’s Pilbara production capacity to 283-million tons a year.

The Nammuldi project would extend the existing mining operation to below the water table, increasing the mine’s life by some 14 years, at a production rate of 16-million tons a year.

A further $1.2-billion would be spent on the Cape Lambert port and rail early works, needed for the proposed expansion to 353-million tons a year. Rio’s share of the Cape Lambert investment would amount to around $700-million.