Rio Tinto to make first iron-ore shipment in India, to Essar

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Anglo-Australian mining major Rio Tinto today said it will make its first ever sale of iron ore in India, to Essar Steel.

"This is only one shipment at this stage, but this is very significant in terms of forging a relationship with Essar and potentially opening doors," Rio Tinto chief executive of iron ore Sam Walsh said in a  statement.

"We have long believed that India is a long-term market of great potential, and this development should be seen in that context. It is also potentially significant given our iron ore project in Orissa, which we expect will also be a source to supply the growing Indian market," Walsh added.

This is the first ever sale to India from Rio Tinto's Pilbara mine in Australia, the company said.

"There will be a shipment arriving there (India) in December," Walsh said. When contacted Essar Steel spokesperson said the company is expanding its annual production capacity to 10 million tonnes by next year and would need more iron ore to feed the augmented line.

"Essar Steel is the in the process of commissioning its new assets for increasing steel production capacity from 4.6 MTPA to 10 MTPA.

In order to optimise operations of these units and expeditiously ramp up the capacity, iron ore from international sources is being considered," the spokesperson said.