The mine’s current port allocation is 5Mtpa but with the staged expansion of Dalrymple Bay Coal Terminal from 55Mtpa to 85Mtpa due to be completed late this year, Hail Creek’s allocation will rise to 7.6Mtpa.

Construction of the expanded mine facilities is nearing completion and has not interfered with the existing operations, according to Rio Tinto.

Rio estimates it will sustain capex for the expanded operations at about $A30 million per annum and expects to meet its $US223 million capital budget for the project.

Amro also predicted NSW mines would struggle when the expansion in rail and port capacity over coming years puts pressure on them to increase production.

Amro said export coal quantities from NSW are restricted by logistics capacity but once the constraint is lifted, it will fall on the mines to lift production rates if they are to continue benefiting from the current price environment.

“We believe the increased tightness in mining supplies and the labour market will make it difficult for the miners to achieve the growth rates they once thought were possible.”

Amro’s DCF (discounted cash flow) valuation for Rio is $A56.8 per share with a price target of $A95.

“The key risks to our target price include ongoing or potential operational issues at Grasberg, Palabora and IOC, along with the delivery of Rio’s growth projects,” Amro said.