Global mining giant Rio Tinto said yesterday it planned to invest €3.31 billion to develop its iron ore business in Australia and Guinea to meet strong Chinese demand.

The Anglo-Australian group said the investment covered US$3.7 billion for expansion of the Pilbara iron ore operations in Western Australia and US$501 million for infrastructure development at the Simandou iron ore project in Guinea.

“We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario,” Rio Tinto chief executive Tom Albanese said in a statement. Rio Tinto Iron Ore chief executive Sam Walsh added: “We continue to see positive prospects for medium- to long-term iron ore demand driven by ongoing growth in Chinese consumption.

“We continue to forecast that annual Chinese steel production will grow from its current level of around 700 million tonnes to around one billion tonnes a year out towards 2030.

“This demand growth is coupled with an increasingly challenged supply response, as several high-profile competitor projects have recently been either delayed or postponed.”