Ahead of the release of its March quarter production and sales report later today, Rio Tinto has revealed its second major spending plan in a week.
Total investment in projects in South Africa and the US will be more than $US700 million in a further sign one of the world’s biggest miners is starting to investment more after divesting itself of billions of dollars of unwanted coal and aluminium assets.
Rio said yesterday it will invest an extra $US302 million to develop its huge Resolution copper project in the US state of Arizona. Resolution is 55% owned by Rio and 45% by BHP.
Rio said the new investment will be spent on additional drilling, ore-body studies, infrastructure improvements and permitting activities with the miner aiming to advance the project to the final stage of the permitting phase.
The Resolution project is years off – it is still undergoing a tortuous approvals process Federally and on a state basis in the US. If and when it comes on stream, it has the capacity to supply 25% of the entire US copper market a year, according to Rio.
“The comprehensive permitting process is well underway with the environmental impact study on track to be completed next year according to the regulators schedule,” Jacques added.
The driver is the coming boom in production of electric vehicles, which use twice as much copper as internal combustion engines.
“The rise of electric vehicles, battery storage, new transmission technology and other green energy innovations are highly copper intensive,” Jacques said.
“We need to prepare now to meet this future demand.”
In February, Rio said it made a highly promising copper, gold and silver find at its Winu prospect in Western Australia’s Eastern Pilbara region.
Rio and BHP are partners in the world’s biggest copper mine – the huge Escondida operation in northern Chile. Rio is also sending billions on its Mongolian copper mine called Oyo Tolgoi.
BHP is expanding the size of its huge Olympic Dam copper, gold and uranium mine in South Australia and late last year revealed it had found a similar but perhaps smaller high grade ore body nearby with lots of copper.
Last week Rio Tinto announced it had approved the $US463 million construction of the Zulti South beach sands project in South Africa, a move it says will extend the presence of its majority-owned Richards Bay Minerals in the country.
The mine extension – for which Rio Tinto will contribute $US343 million – will help RBM maintain its output of high-margin zircon and rutile in the face of a declining orebody grade at the company’s existing Zulti North lease area.
Construction on Zulti South is scheduled to start in ina couple of months – subject to the granting of all necessary permits, with first commercial production expected in late 2021.
