Rio Tinto invests to strengthen copper supply in USA

(Posted on 21/06/23)

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.

Latest News

Electric Arc Furnace boost for British Steel

British Steel has been granted planning permission to build an Electric Arc Furnace at its Scunthorpe... Read more

Leading event for grain handling and processing returns to Omaha

The National Grain and Feed Association (NGFA) in the USA, Grain Elevator and Processing Society (GEAPS... Read more

American Feed Industry commends vital supply chain legislation

The American Feed Industry Association (AFIA) has commended Representatives Ashley Hinson, R-Iowa-02... Read more

NGFA says NASS reports are critical to agribusiness operations

In a letter to U.S. Agriculture Secretary Tom Vilsack, the National Grain and Feed Association (NGFA... Read more

Bauxite and aluminium businesses deliver stable Rio Tinto results

Bauxite production of 13.4 million tonnes was 11% higher than the first quarter of 2023 for Rio Tinto... Read more

Rio Tinto spends more than A$16.1 billion with Australian suppliers

Rio Tinto increased its spend with suppliers and local businesses in Australia to more than A$16.1 billion... Read more

Cargill increases its renewable energy capacity by more than 40%

Cargill has reported increasing its contracted renewable energy capacity by 42% after signing five new... Read more

Agreement to set up KEZAD steel recycling and production facility

The UAE’s largest operator of integrated and purpose-built economic zones, Khalifa Economic Zones... Read more

Senate legislation includes phosphate and potash as critical minerals

The Fertilizer Institute (TFI) has praised the U.S. Senate for introducing bipartisan legislation to... Read more

Agribusiness expert’s legacy and optimism for GrainCorp’s future

Farmer, Company Director and long-standing member of the GrainCorp Board of Directors, Dan Mangelsdorf... Read more