Labrador Iron Ore Royalty Income Fund - IOC Announces $500 million Expansion Program

    TORONTO, March 11 /CNW/ - Iron Ore Company of Canada (IOC) announced
today a $500 million expansion program to increase annual production to
22 million tonnes with a feasibility study to increase production to
25 million tonnes (see attached IOC press release). When completed this will
result in a substantial increase in the royalty revenue received by Labrador
Iron Ore Royalty Income Fund from IOC, subject to future prices and exchange

    Iron Ore Company of Canada


    For Immediate Release: March 11, 2008

    (Canada) St. John's, Labrador City, Sept-Iles, Montreal - March 11, 2008

    The Iron Ore Company of Canada (IOC) and Rio Tinto have announced the
approval of $500 million to increase the IOC's annual production of iron ore
concentrate to 22 million tonnes. The investment is the first phase of an
expansion program that may see a 50% increase in production capability by
    Work will commence immediately to expand IOC's mining and processing
facilities in Labrador West and increase transportation capacity on its 418-km
railway to its port facilities in Sept-Iles, Québec. The investment includes
the purchase of new mining equipment, as well as installation of a new crusher
station in the mine and autogenous grinding mill in the concentrator, as well
as a 6-kilometre overland conveyor to link them together. New locomotives and
rail cars will be purchased to increase railway capacity.
    The remainder of the expansion program is currently in feasibility
studies and a decision will be made later this year on plans to further
increase annual concentrate production to more than 25 million tonnes and
pellet production to 14.5 million tonnes.
    IOC Chairman and Rio Tinto Iron Ore Chief Executive Sam Walsh said the
decision highlighted not only the value of Rio Tinto's global platform of iron
ore production, but also the level of confidence in market conditions over the
longer term.
    "The iron ore market is as tight as it has ever been and our sustained
and substantial reinvestment in our operations in Canada and worldwide
demonstrates the confidence we have in that market," he said. "The IOC
expansion program emphasizes the Group's ability to increase supply from an
existing strong base across several continents."
    IOC President and CEO, Terence F. Bowles, said the expansion will provide
substantial employment and economic growth in our communities of Labrador City
and Sept Iles. IOC's 1,900 people, the majority which work in Newfoundland and
Labrador, and constitute the Provinces largest industrial workforce, will grow
by a further 200 with this expansion. Construction jobs are expected to peak
at 250 over the next three years.
    "This investment secures the long-term future of our operations and
improves the livelihoods of those around us," said Mr. Bowles, speaking at a
news conference broadcast on-line from St. John's, the capital city of
Newfoundland and Labrador. "IOC has been the main driver of the Labrador West
economy for almost 50 years, and this expansion program ensures that a new
generation of families in the region can be confident that there will be
rewarding careers for years to come," he added.
    "This major expansion reflects the current strong market conditions as
well as the confidence of our shareholders in our ability to deliver," added
Mr. Bowles. "IOC's commitment to sustainable development is fully reflected in
this expansion program. The company is consulting and working very closely
with local community stakeholders in Labrador City and Sept-Iles to optimize
economic and social impacts of the expansion and to protect the natural

    About Iron Ore Company of Canada

    IOC is Canada's largest iron ore producer, with iron ore being one of
Canada's most important mineral products in terms of both tonnage and value.
IOC is known globally for the high quality of its products, which are often
used by steelmakers to improve quality and productivity and reduce green house
gas emissions. Its broad product range is sold globally to all segments of the
steel industry including the high growth direct-reduction sector. IOC has
1.3 billion tonnes of iron ore reserves and significant resources and
exploration potential beyond this.

    Rio Tinto is the major shareholder of IOC (58.72%), along with Mitsubishi
Corporation (26.18%), and Labrador Iron Ore Royalty Income Fund (15.10%). Rio
Tinto is a leading international mining group headquartered in the UK, whose
focus is finding, mining, and processing mineral resources. Rio Tinto Iron Ore
is headquartered in Perth, Western Australia with Sam Walsh as Chief
Executive. This investment is one of many being made in Canada by IOC's major
shareholder Rio Tinto, which has activities in more than 40 countries
worldwide, including mining developments and acquisitions in British Columbia,
Northwest Territories and Quebec.

    Cutline for Photo: (Conveyor) a rendering shows an aerial view of the
Labrador City mine, which will see a new overland conveyor installed as part
of its production upgrade.

    For more information please contact:
    Michel Filion, Director of Communications and External Relations
    IOC: Montréal, Québec 514-285-8441

    Forward-Looking Statements

    This announcement includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this announcement, including,
without limitation, those regarding Rio Tinto's financial position, business
strategy, plans and objectives of management for future operations (including
development plans and objectives relating to Rio Tinto's products, production
forecasts and reserve and resource positions), are forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Rio Tinto, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements.
    Such forward-looking statements are based on numerous assumptions
regarding Rio Tinto's present and future business strategies and the
environment in which Rio Tinto will operate in the future. Among the important
factors that could cause Rio Tinto's actual results, performance or
achievements to differ materially from those in the forward-looking statements
include, among others, levels of actual production during any period, levels
of demand and market prices, the ability to produce and transport products
profitably, the impact of foreign currency exchange rates on market prices and
operating costs, operational problems, political uncertainty and economic
conditions in relevant areas of the world, the actions of competitors,
activities by governmental authorities such as changes in taxation or
regulation and such other risk factors identified in Rio Tinto's most recent
Annual Report on Form 20-F filed with the United States Securities and
Exchange Commission (the "SEC") or Form 6-Ks furnished to the SEC.
Forward-looking statements should, therefore, be construed in light of such
risk factors and undue reliance should not be placed on forward-looking
statements. These forward-looking statements speak only as of the date of this
announcement. Rio Tinto expressly disclaims any obligation or undertaking
(except as required by applicable law, the City Code on Takeovers and Mergers
(the "Takeover Code"), the UK Listing Rules, the Disclosure and Transparency
Rules of the Financial Services Authority and the Listing Rules of the
Australian Securities Exchange) to release publicly any updates or revisions
to any forward-looking statement contained herein to reflect any change in Rio
Tinto's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
    Nothing in this announcement should be interpreted to mean that future
earnings per share of Rio Tinto plc or Rio Tinto Limited will necessarily
match or exceed its historical published earnings per share.
    Subject to the requirements of the Takeover Code, none of Rio Tinto, any
of its officers or any person named in this announcement with their consent or
any person involved in the preparation of this announcement makes any
representation or warranty (either express or implied) or gives any assurance
that the implied values, anticipated results, performance or achievements
expressed or implied in forward-looking statements contained in this
announcement will be achieved.

    %SEDAR: 00002722E

For further information:

For further information: please contact: Bruce C. Bone, Chairman & Chief
Executive Officer, (416) 863-7133, 26th Floor, 40 King Street West, Toronto,
Ontario, M5W 2X6, Tel: (416) 863-7133, Fax: (416) 863-7425

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