Australian mining major Rio Tinto Group, also the world's third biggest mining company, is set to infuse some $2 billion into its Orissa iron ore project venture in India amid reports the country's local steel demand alone will balloon by 9 per cent annually over the next five years.
"The Moncorvo mines project will go ahead, but most likely without Rio Tinto," said one of the sources. "Rio Tinto is choosing to give up smaller projects and Moncorvo should be one of them."
The global mining giant had been earlier interested in Moncorvo, located in northern Portugal, which holds one of Europe's largest iron ore deposits.
But falling global commodity prices, rising operational costs, as well as shareholder pressure to refund capital prompted Rio Tinto to reexamine its plans, opting to focus on its Western Australia and Guinea iron ore project and the Mongolian Oyu Tolgoi copper project.
Regardless of Rio Tinto backing out of the project, the government of Portugal remained confident there are other foreign investors interested in the project.
Portugal's mining resources range from iron ore to gold, silver and tungsten.
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