Rio Tinto is investing in its Kennecott operation near Salt Lake
City, Utah, to strengthen its supply of copper in the United States
by increasing production from underground mining and improving the
health of key assets.
$498 million1 of funding has been approved to deliver
underground development and infrastructure for an area known as the
North Rim Skarn2 (NRS). Production from the NRS will commence in
2024 and is expected to ramp up over two years, to deliver around
250 thousand tonnes of additional mined copper over the next 10
years3 alongside open cut operations.
As the above production target is in part underpinned by
Inferred Resources, we note in accordance with ASX Listing Rule
5.16.4 that there is a low level of geological confidence
associated with Inferred Mineral Resources and there is no
certainty that further exploration work will result in the
determination of Indicated Mineral Resources or that the production
target itself will be realised.
In September 2022, Rio Tinto approved development capital
totalling $55 million to start underground mining in an area known
as the Lower Commercial Skarn (LCS). Underground production within
LCS started in February 2023, and is expected to deliver a total of
around 30 thousand tonnes of additional mined copper through the
period to 20274.
These two investments will support Kennecott in building a world
class underground mine which will leverage battery electric vehicle
(BEV) technology, following a successful trial in 2022. BEV’s
create a safer and healthier workplace for employees underground,
increase the productivity of the mine and reduce emissions from
operations.
A $300 million rebuild is also underway at the Kennecott
smelter. The rebuild is the largest in Kennecott’s history and
commenced in May 2023. A further $120 million is being invested to
upgrade the refinery tank house structure and update Kennecott’s
molybdenum flotation circuit with a state-of-the art, fully
automated system. As the second largest copper producer in the US,
this will allow Kennecott to continue to deliver a high quality
product to customers.
Rio Tinto Copper chief operating officer Clayton Walker said:
“We are investing to build a world class underground mine at
Kennecott and strengthen our processing facilities, to meet the
growing demand for copper in the United States, a key material for
domestic manufacturing and the energy transition. This investment
will position Kennecott to continue the strong contribution it has
made as part of the Salt Lake Valley community for 120 years,
injecting about $1.5 billion annually to the local Utah
economy.”
Studies to inform decisions on the next phases of expanding
underground production continue in parallel with work that is being
advanced to extend open pit mining at Kennecott beyond 2032.
All the above investments are already included in Rio Tinto’s
share of capital investment guidance for 2023 to 2025.
Kennecott Underground Mineral Resources and Ore
Reserves
The NRS has updated Indicated Mineral Resources of 10.8 Mt at
2.93 % copper, 1.20 g/t gold, 65.97 g/t silver, 0.008 % molybdenum,
and Inferred Mineral Resources of 7.7 Mt at 3.13 % copper, 0.96 g/t
gold, 18.41 g/t silver, and 0.005 % molybdenum identified based on
additional drilling and an initial Probable Ore Reserve of 3.0 Mt
at 2.39 % copper, 1.77 g/t gold, 18.59 g/t silver, and 0.010 %
molybdenum5.
Mineral Resources are reported in addition to Ore Reserves.
Mineral Resources and Ore Reserves are quoted on a 100 per cent
basis.
A copy of the Table 1 Release is available here
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
1 All dollar values are in USD.
2 The NRS Mineral Resources and Ore
Reserves, together with the Lower Commercial Skarn (LCS) Mineral
Resources and Ore Reserves, form the Underground Skarns Mineral
Resources and Ore Reserves.
3 This production target for 2023 to 2033
is underpinned as to 25% by Probable Ore Reserves, 9% by Indicated
Resources, and 66% by Inferred Resources. Mined copper is reported
as total recoverable metal. These estimates of Mineral Resources
and Ore Reserves were reported in a release dated 20 June 2023
titled “Rio Tinto Kennecott Mineral Resources and Ore Reserves”
(Table 1 Release) which is available on Rio Tinto's website at
resources & reserves (riotinto.com), and have been prepared by
Competent Persons in accordance with the requirements of the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves, 2012 (JORC Code) and the ASX Listing
Rules.
4 This production target is reported as
total recoverable metal and is underpinned as to 100% by Probable
Ore Reserves. These estimates of Mineral Resources and Ore Reserves
were reported in a release to the ASX dated 27 September 2022
titled ”Rio Tinto Kennecott Mineral Resource and Ore Reserves” and
have been prepared by Competent Persons in accordance with the
requirements of the JORC Code and the ASX Listing Rules.
5 These Mineral Resources and Ore Reserves
have been reported in accordance with the JORC Code and the ASX
Listing Rules in the Table 1 Release. The Competent Person
responsible for the information in that release that relates to
Mineral Resources is Mr Ryan Hayes, a Member of the Australasian
Institute of Mining and Metallurgy (MAusIMM). The Competent Person
responsible for the information in that release that relates to Ore
Reserves is Mr Stephen McInerney, a Member of the Australasian
Institute of Mining and Metallurgy (MAusIMM). Rio Tinto confirms
that it is not aware of any new information or data that materially
affects the information included in the Table 1 Release, that all
material assumptions and technical parameters underpinning the
estimates in the Table 1 Release continue to apply and have not
materially changed, and that the form and context in which the
Competent Persons’ findings are presented have not been materially
modified.
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Category: Kennecott
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