KBR Wins Rio Contract To Upgrade Pilbara Fuel Assets

KBR Inc. (KBR) said it received a contract from Rio Tinto PLC (RIO) to upgrade the fuel storage system that underpins the mining company's iron ore operations in Western Australia's Pilbara region, where it plans to significantly increase output over the coming years.

KBR will install fuel assets and storage facilities in five locations, the Houston-based company said in a statement Tuesday. The upgrade is due to be completed in July 2013, and the financial terms of the deal weren't disclosed.

KBR said that once the project is completed, Rio's fuel network in the Pilbara region will adopt the company's rail system to transport diesel to hubs for storage, and for further distribution to mines and power-generation facilities. That would reduce the need to transport fuel on public roads from Port Hedland, 400 kilometers to the north.

Earlier Tuesday, Rio said it remained on track to boost iron ore production to 283 million tons a year by the end of 2013 and continued to study lifting that to 353 million by the second half of 2015. Output in 2010 was 4% higher at 191.8 million tons.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]