Miner Rio Tinto will use driverless trains to deliver its iron ore to ports in Western Australia in what it said will be the world's first automated, long-distance, heavy-haul rail network.
Rio said a US$518 million investment would see the launch of the first driverless train in the vast and mineral-rich Pilbara region in 2014 with the full project scheduled for completion a year later.
"Expanding Pilbara iron ore production is a high-return and low-risk investment for Rio Tinto that will enhance shareholder value," said Rio's chief executive for Australia and iron ore, Sam Walsh.
"Automation will help us meet our expansion targets in a safe, more efficient and cost-effective way."
The Anglo-Australian mining giant, which is facing sustained demand from Asia for raw materials, said automation would improve efficiency and allow the company to address the significant skills shortage facing the industry.
But the announcement has raised fears that the 500 workers Rio employs on its Pilbara trains will be axed, with the Construction, Forestry, Mining and Energy Workers' Union describing the skills shortage line as propaganda.
"This is all about profitability at the expense of workers and workers' jobs," the union's Gary Wood told the ABC.
Rio said that as it expanded its businesses, the number of people it employed would increase overall but the skills required would be a little different.
"Our business, no matter what, even with the autonomous train programme will still need more employees in five years time than we need today in total," Rio Tinto's Pilbara iron ore chief Greg Lilleyman told the state broadcaster.
Rio, which this month posted annual net earnings of US$5.8 billion, plans the large-scale use of automation at its mines and projects and has already said it will deploy 150 driverless trucks and use remote-controlled drills.
The company currently runs 41 trains, including 9,400 iron ore cars and 148 locomotives, from mines to ports on its 1,500-kilometre (930 miles) rail network.
Rio, among the world's top producers of iron ore, plans to lift production capacity in Western Australia from an expected 230 million tonnes a year to 283 million tonnes by mid-2013 with further expansion to 353 million by mid-2015.