Aug 2 (Reuters) - Rio Tinto Plc RIO.L
* Rio Tinto approves development of Silvergrass mine
* Expected internal rate of return for this investment well in excess of 100 per cent and a pay back of less than three years
* As anticipated in previous guidance, this Silvergrass investment adds 10 million tonnes of capacity
* Final stage of Silvergrass development is subject to obtaining necessary approvals from west australian government.
* Will invest an incremental $338 million to complete development of Silvergrass mine in its world-class Pilbara iron ore operations in Western Australia
* Key element in maintaining Rio Tinto's premium Pilbara blend, and also delivers incremental tonnage and lower unit costs.
* Final stage of Silvergrass development is subject to obtaining necessary approvals from West Australian government
* Investment will lower mine operating costs by replacing road haulage with a more efficient conveyor system Source text for Eikon: Further company coverage: RIO.L