Rio Tinto will proceed with a multi illion dollar expansion of its Australian iron ore division after CEO Mr Sam Walsh gave his clearest comments to date on the plan to expand to 360 million tonnes per year.

Despite shareholders urging the company to preserve cash, Mr Walsh said that the expansion would happen, with the only uncertainties being how quickly it was developed and in what way. The existing plan is to spend AUD 5 billion subject to board approval in November and push ahead immediately.

Mr Walsh said that while that specific approach is not certain to be approved, it now appears some sort of pathway to 360 million tonnes is certain. 360 will happen, it will go ahead. The issue is timing and the way we go ahead but it is a robust project, it’s a good project and the market will need the iron ore that comes from this.

He said that the company had infinite flexibility around the expansion, meaning it may choose to develop it gradually if it wanted to spread its spending over a larger number of years. What will drive that expansion will be what the market demands physically need.

He added that we are going to be very rational and logical about this to ensure we are delivering value to shareholders and not just proceeding with something because its on the books.