pilbara operations, page-3

Rio Tinto may place some of its iron ore mines in Western Australia on care and maintenance over Christmas and New Year in response to slowing demand from Chinese steel mills.

The mining giant was considering ''trimming operations'' at some of its iron ore mines as part of its recently announced 10% reduction in exports from the Pilbara region in 2008, a spokesman said.

This ''trimming'' would occur between December 22 and January 2, and may result in some mines being placed on care and maintenance during that period, the spokesman said.

The workforce had agreed to take leave if they could over that two-week period, he said.

''That is consistent with our previously announced cut to production of what amounted to 10% on an annualised basis for the calendar year,'' he said.

''It is also consistent with previous years' practice.

''We will make a decision closer to the time about what sites and services would remain operating and at what level.

''Essentially we would be looking to trim our operations in line with the reduced production and reduced shipping that was previously announced.''

The company last week said it expected to ship between 170 million tonnes and 175 million tonnes of iron ore from the Pilbara in 2008, down 10% on its previous estimate.

Rio Tinto continued to undertake rail and port studies for its planned expansion to 220 million tonnes of iron ore per a year from the Pilbara, the spokesman said.

He said Rio Tinto would decide early next week whether to expand to this level.

Rio Tinto on Monday terminated a contract with Fleetwood Corporation for the provision of staff accommodation that had been related to an increase in Pilbara production to 320 million tonnes a year by 2012.

''The contract termination is not expected to have a significant impact on the Fleetwood group earnings for the 2009 financial year,'' Fleetwood said.