Rio Tinto inks deal to bring iron ore rail car manufacturing to Pilbara (updated)

Engenco

13/06/2023 03:24

(Adds further details in paragraphs 1, 2, & 3, background in
paragraphs 7 & 8)
       June 13 (Reuters) - Mining giant Rio Tinto  RIO.AX  said
on Tuesday it will partner with Western Australia-based Gemco
Rail to bring local iron ore rail car manufacturing and bearing
maintenance to the Pilbara region. 
    Rio intends to invest about A$150 million ($101.2 million)
to acquire 100 domestically built ore rail cars over six years,
it said. 
        Adequate rail and road infrastructure are crucial to
iron ore producers as they add to the convenience of swiftly
moving around finished products to consumption centres, while
also easing the process of receiving raw materials from local
mines. 
  
        The company, which operates about 14,000 ore cars across
its Pilbara rail network, said that each ore car can hold an
estimated 118 tonnes of iron ore. 
  
    Gemco, which is part of transport solutions provider Engenco
 EGN.AX , will build the first 40 ore cars at its facility in
Forrestfield, with the first car expected to be delivered in
2024.
        Rio also plans to establish an additional construction
facility by the end of 2024 in order to aid the development of
Gemco's ore cars. 
  
        The new facility, based in Karratha, will reduce
transportation woes between Pilbara and Perth, while reducing
300 tonnes of carbon dioxide each year, Rio said. 
  
        "This will bring a new industry to Pilbara, creating
jobs and providing more opportunities for local and Indigenous
businesses," Rio Tinto Iron Ore's Chief Executive Simon Trott
said. 
  
        Once operational, Gemco Rail is expected to build an
average of 10 ore cars per year, under the partnership. 
  
        To further smoothen its operations in Pilbara, Rio said
it will embrace continued investment in bearing refurbishment, a
sustainable and green maintenance procedure that delivers
significant reduction in raw material consumption, over 10
years. 
  

    
    


($1 = 1.4819 Australian dollars)

 (Reporting by Roushni Nair and Archishma Iyer in Bengaluru;
Editing by Sherry Jacob-Phillips and Sonia Cheema)
 ((Archishma.Iyer@thomsonreuters.com;))