It is reported that Deutsche Bank analysts expressed confidence over Rio Tinto following a positive visit to the mining giant key Pilbara iron ore operation in Australia.

The analyst team led by Mr Rob Clifford, note Rio management upbeat projection for expansion of the facility with the company targeting an increase in production from 225 to 333 million tonnes per annum. The expansion could come in six months ahead of schedule in time for the first half of 2015 and remains on budget.

The company also indicated to Deutsche that the expansion may be upscale to 351 million tonnes per annum. Additionally work has commenced on further expansion to 433 million tonnes per annum and beyond.

The analysts are encouraged by indications from Rio that costs are being contained but note that no CAPEX update was provided on the USD 14.8 billion Pilbara expansion and USD 10 billion Simandou iron ore project in Guinea. Across the group, Rio has identified expansion of up to 650Mtpa in iron ore production.

Currently around 60% of the CAPEX for the Phase 1 expansion at Pilbara to 283 million tonnes per annum is approved but only around 2% to 5% for the Phase 2 expansion to 333 million tonnes per annum.

(Sourced from www.proactiveinvestors.co.uk)