Rio Tinto Ltd announced Monday their majority-owned Mesa A/ Warramboo mine in Western Australia has begun producing iron ore.

More than two years after the construction began on the project, in the iron-rich Pilbara region, the 1 billion Australian dollar ( 901 million U.S. dollar) mine achieved first production on Friday.

"This is a great day for Rio Tinto and for the Pilbara," said Rio Tinto's iron ore chief Sam Walsh.

The open-cut mine, which Rio Tinto owns a 53 percent stake, would have initial production of 20 million tons per annum, increasing to 25 million tons by 2011, the company revealed.

High-grade reserves at the Mesa A/ Warramboo deposit are estimated to be 249 million tons, with a mine life of 11 years.

About 220 people are expected to be employed at the new mine.

"I am especially pleased to note that construction has been completed on time and inside budget," Walsh added.