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Rio to Invest $518 Million in Driverless Iron Ore Trains

Reuters
Sunday, 19 Feb 2012 | 8:50 PM ET

Rio Tinto is investing $518 million in driverless trains for its 1,500 kilometer (930 mile) Western Australian iron-ore rail network, increasing network capacity as the world no. 2 iron ore miner aims to boost output 60 percent by 2015.

Coal trains await unloading at Port Waratah Coal Services on April 12, 2007 in Newcastle, Australia.
Corey Davis | Getty Images
Coal trains await unloading at Port Waratah Coal Services on April 12, 2007 in Newcastle, Australia.

It plans to launch the first driverless train in 2014 and complete the set-up a year later, adding to the driverless trucks at its mines, Rio Tinto said on Monday, with the trains to be remote controlled from Perth, 1,500 kilometers away.

The company had laid out plans for the automated hauling network several years ago, but put them on hold during the global financial crisis in 2008, when it was struggling with a massive debt burden from its takeover of Alcan.

By getting rid of drivers, Rio Tinto will no longer have to slot in times for driver changeovers, giving it more flexibility in scheduling trains and effectively creating more capacity in the network.

"Automation will help us meet our expansion targets in a safe, more efficient and cost-effective way," Rio Tinto iron ore chief Sam Walsh said in a statement.

The company currently runs 41 trains with 148 locomotives and 9,400 iron ore cars.

The move has raised the ire of unions, who say the company is boosting profits at the cost of jobs.

The company, which has raised concern about declining productivity of workers in Australia, says it will be creating more jobs as it moves to expand iron ore production to 353 million metric tons a year by 2015.

"Automation also helps us address the significant skills shortage facing the industry, providing a valuable opportunity to improve productivity," Walsh said.

Rio's share of the investment is $478 million.

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