The project involves the construction of a new borefield and pipeline system, set for completion by mid-2013, in a bid to expand annual production capacity of the mine up to 333 million tonnes.
Rio Tinto will build, own and operate the new borefield, located in the lower Bungaroo Valley, 35 kilometres south east of the town of Pannawonica, with an annual water capacity of 10 gigalitres.
As environmental regulations become more stringent, mining companies across the world are facing significant water challenges (see WWi article on water challenges in Latin America's mining industry).
Sam Walsh, chief executive, Iron Ore and Australia, Rio Tinto, said: "We will ensure the future reliability of our water supply without any interruption to current operations."
Under the proposal, which has been agreed in principle with the Government of Western Australia, Rio Tinto will surrender its existing priority entitlements to the Millstream water supply, the system Rio Tinto constructed and financed 40 years ago. In return, the government has agreed to amendments to secondary processing obligations.
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