Digging deep for rich rewards The Rio Tinto Cape Lambert mine. A RECLAIMER at Rio Tinto's port at Cape Lambert on the coast of Western Australia chews its way through a 200,000-tonne stockpile of iron ore. The ore is from the company's mine in Yandicoogina, 95 kilometres northwest of Newman in the Pilbara, while the machine itself is operated from the company's hi-tech operations centre 1500 kilometres south in Perth. The price of iron ore has remained strong this year, coming off its 2013 high of almost $US160 a tonne in February but holding at about $US130. Long-term demand from Asia is expected to remain strong, although new supplies will probably weigh on prices. With cash costs of between $US30 and $US50 a tonne, Rio has plenty of headroom and is looking at boosting production of iron ore by 50 per cent. Australia's biggest iron ore miner, Rio, has been expanding capacity at its Cape Lambert port, one of two it owns, so that its WA mines can export 290 million tonnes a year of iron ore. It will then increase the capacity of its ports and railways to take 360 million tonnes a year and is considering upgrades of its mine capacity in the Pilbara to be able to supply this amount of iron ore. The company usually has 14 stockpiles at the port site at any one time, each with a different ore type or product. One whole stockpile will fill each ship before its 10-day journey to the ports of Tianjin or Dalian in China or southern Japan. Rio, which has been expanding throughout the China boom, now produces 237 million tonnes of iron ore a year. Last year, Rio's Pilbara iron ore mines made $US9.7 billion of net profit, or $26 million a day, which was 70 per cent of the mining giant's total earnings. Rio's chief executive, Sam Walsh, ran the company's iron ore operations from Perth until January, when he shifted to London to run the company. "In iron ore, our business continues to go from strength to strength," he told investors last month after the business logged a $US4.2 billion ($4.6 billion) first-half net profit. This was down 16 per cent from a year earlier because of lower prices but accounted for 99 per cent of total underlying earnings because of losses in other businesses.