IHI Wins $182 Million Rio Tinto Gas-Turbine Order

By Masumi Suga

Aug. 11 (Bloomberg) -- IHI Corp., Japan's third-largest heavy-machinery maker, won a 20 billion yen ($182 million) order for four gas turbines from Rio Tinto Group as the mining company replaces old power plants with fuel-efficient generators.

IHI and its Australian engineering unit will handle the design, procurement and construction of the LM6000 gas turbines, each capable of producing 40 megawatts of electricity, the Tokyo- based company said today in a statement through the city's stock exchange. The turbines will be completed in May 2010.

London-based Rio Tinto, the world's second-largest iron-ore producer, is spending $500 million to upgrade the power plants at its operations in Western Australia, aiming to cut carbon emissions by 25 percent. Electricity generated by the gas turbines will be supplied to Rio's iron-ore mines in Pilbara and the ports of Cape Lambert and Dampier in western Australia.

The gas turbines were developed by converting generators for jet engines, IHI said. The latest order will take the number of gas turbines supplied by IHI to Rio to seven, the statement said.

Two steam-fired power stations will be shut down and replaced with natural-gas turbines, Rio Tinto said on July 15.

IHI gained 3.1 percent to 202 yen as of 12:53 p.m. on the Tokyo Stock Exchange.

To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net.
Last Updated: August 11, 2008 00:45