It comes after the 10 million tonne per annum project got Rio board approval last month.

The proposal was approved under Rio’s existing State Agreement.

WA State Development Minister Bill Marmion said the project would create around 500 jobs during construction, and 25 additional positions during operations.

“Expanding production from Silvergrass will allow Rio Tinto to sustain the quality of their Pilbara blend product and maintain current production levels,” he said.

“The expansion provides a significant boost to the Western Australian resources sector and shows our state continues to be an attractive place for large-scale investment.”

The development will maintain Rio’s premium Pilbara blend and lower costs, replacing truck haulage from the satellite operation with a primary crusher and 9km conveyor to the existing processing plant at its Nammuldi operations.

Construction is expected to start immediately for first production in late 2017.

Marmion will also open Rio’s annual Colours of our Country Aboriginal art exhibition at its Perth headquarters tonight, which runs until next Friday.

Shares in Rio rose 1.2% to $A47.98.