Australia's Roy Hill mine may start ahead of 2015 schedule

SYDNEY, Sept 2 (Reuters) - Australia's 55-million-tonnes-per-year Roy Hill iron ore mine could be operating ahead of its September 2015 start date despite a mounting global supply glut, said Gina Rinehart, chairman of majority owner Hancock Prospecting Pty Ltd.

"Roy Hill's staff morale is high, and the hardworking team hope to be able to bring the first shipment due September 2015, ahead of time, Rinehart said in a statement.

Rinehart, a billionaire through royalties paid on other iron ore mines, negotiated a $7.2 billion debt funding package to complete the work on Roy Hill and accompanying rail and port infrastructure projects.

Hancock Prospecting owns 70 percent of the Roy Hill project. Japan's Marubeni Corp holds 15 percent, South Korean steelmaker POSCO (KSE: 005490.KS - news) 12.5 percent and Taiwan's China Steel Corp 2.5 percent.

Iron ore continues to generate big returns even as prices fall. Miners in Australia, the world's biggest supplier, are counting on economies of scale to maintain profits for the steel making material.

BHP, the world's number three iron ore producer, is spending $3.25 billion to add 20 million tonnes to the market on top of its existing expansion target of 270 million tonnes a year.

Iron ore stood at $87.10 a tonne on Tuesday, down 35 percent on the start of the year.

"Now (NYSE: DNOW - news) is the time for others to really feel the consequences of the price against their operating costs and for them to make decisions," Sam Walsh, chief executive of world no. 2 producer Rio Tinto (Xetra: 855018 - news) warned last month after announcing profit from iron ore made up 92 percent of first-half underlying earnings of $4.68 billion. (Reporting by James Regan)