Mining giant Rio Tinto has loaded the first shipment of iron ore from its expanded Pilbara operations in Western Australia.

Rio says the milestone begins the commissioning of its expanded port, rail and mine operations in the Pilbara, which will increase output to 290 million tonnes per year.

Rio’s iron ore chief executive Andrew Harding said the expansion works had come in a demanding operating environment.

“We will continue to seek further productivity improvements from our fully-integrated Pilbara system in order to maximise the return on investment,” Mr Harding said.

In a presentation to analysts, Rio Tinto said steel stocks in China had fallen by nine per cent in July, and improved steel prices in China had supported iron ore prices.

It also said Chinese domestic iron ore production costs were forecast to increase, driven by higher currency, a move to underground mines and higher wage and power costs, according to slides lodged with the ASX.

Strict cost cutting contributed to a return to profitability for Rio Tinto in the first half of calendar 2013, helping to offset a higher tax rate and lower commodity prices.

Rio Tinto shares were up $1.18 at $59.48 at 1434 AEST.