Booming Rio Tinto to boost iron ore output

Rio Tinto reckons it can increase its iron ore output by more than 50% in the next five years.

That should go some way towards satisfying China's growing appetite for the mineral, the raw material used to make steel.

The mining giant said today it would raise its investment in the iron ore business from $4 billion (£2.5 billion) this year to $11 billion next.

Chief executive Tom Albanese said: "We believe the first and best use of our strong cash flows and robust balance sheet is to invest in the excellent range of value-adding growth projects across Rio Tinto's product portfolio."

Rio, the world's second-biggest iron ore producer, posted a record first-half profit in August.

Around two thirds of those profits came from iron ore sales.

Much of the expansion will come at Pilbara, the largest mine project undertaken in Australia.

"With our track record of being able to deliver projects on time and on budget we are confident that it (Pilbara) will also be the lowest-risk, highest-return project in Australia for the foreseeable future," added Albanese.

In October Rio and BHP Billiton scrapped plans to form the world's biggest iron ore joint venture after meeting resistance from regulators.

Rio shares slipped 3%, down 122.5p at 4147p. That leaves the business valued at £81.4 billion.