Rio Tinto PLC (RTP) said Friday it will rebuild a smelter furnace at its Kennecott Utah copper operation in the U.S., the company said in an analyst presentation.

The rebuild is scheduled in two tranches, for October this year and May next year.

Rio Tinto didn't provide details on any output loss as a result of the furnace rebuild with the smelter and refinery producing about 240,000 metric tons of copper cathode annually.

The Anglo-Australian miner started wage talks with its 1,900 employees in August with the Kennecott labor agreement expiring this month. Rio Tinto said it has a good relationship with the workforce but has a contingency operating plan in place in case of a strike.

Potential strikes at a number of South American operations overhang the copper market with a strike at the Spence copper mine in Chile possible as early as next week.

Like mining rival BHP Billiton Ltd. (BHP) in a recent presentation, Rio Tinto tipped tight supply in the future because of declining global copper reserves and falling ore grades.

"Assuming a long-term growth in demand of 2.5% until 2030, an average of 30 million tons of contained copper will need to be added each year just to maintain current reserve life," Rio Tinto said.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com