Melbourne, 14 July 2010

Rio Tinto has approved $200 million in funding towards a 50 percent expansion of its iron ore operations in Western Australia, its first big project decision since Australia watered down plans for a new mining tax. The approval clears the way for work to begin on expanding capacity at its Pilbara mines to 330 million tonnes a year by the first half of 2016, the world's second biggest iron ore miner said on Wednesday.

"While the Australian government's decision to abandon its Resource super Profits Tax in favour of the proposed minerals Resource Rent Tax was a major step forward, we remain cautious over what legislation will finally be in place," Rio Tinto iron ore chief executive Sam Walsh said in a statement.

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