Rio Tinto will invest 310 million U. S. dollars to assure a sustainable water supply for its iron ore operations in the Pilbara region of Western Australia, the global mining giant announced on Friday.

The water deal will ensure the company to achieve its planned expansion of annual production capacity up to 333 million tones by 2015.

“The coastal water supply project, which involves construction of a new borefield and pipeline system, will be completed by mid-2013, coinciding with the first ore from the planned increase in production capacity to 283 million tones,”Rio Tinto said in a statement on Friday.

Rio Tinto said it would build, own and operate the new borefield, located in the lower Bungaroo Valley, near the town of Pannawonica, with an annual capacity of 10 gigalitres.

Under the deal, Rio will surrender its existing priority entitlements to the Millstone water supply, allowing that supply to be secured for the towns of Karratha, Roebourne, Dampier and Wickham in the Pilbara region in the north west of Western Australia.

Rio Tinto Chief Executive, Iron Ore and Australia, Sam Walsh said the decision was a major boost to our operational capability and an important investment to support our Pilbara expansion.

Source:cnbusinessnews