ASIA — Rio Tinto ups output in Southeast Asia

Neither weak markets nor the effects of El Nino could deter Rio Tinto (RTP-N) from increasing gold production at its Asian gold operations in 1997.

The company’s 90%-owned Kelian gold mine, in Kalimantan, Indonesia, achieved record production in 1997, churning out 436,000 attributable ounces, an increase of 7% over the 407,000 attributable ounces produced in 1996. The mine and processing plant reached higher production despite adverse weather conditions, including severe drought related to the El Nino meteorological phenomenon. The company attributes increased production to the treatment of higher-grade ore.

Production at the company’s 17%-owned Lihir gold operation in Papua New Guinea (PNG) reached 212,000 oz. gold in 1997, 36,000 oz. of which are attributable to Rio Tinto.

The mine came on stream in May. Co-owners of the mine’s operating company include Vengold (VEN-T), with 10.3%, Niugini Mining, with 17%, the PNG government, with 8.5% and local landowners, with 7%. The remainder is publicly held.

Rio Tinto also reports that construction of a fourth mill at the Grasberg copper-gold project in Irian Jaya, Indonesia, is almost complete. Rio is funding construction costs to the tune of US$750 million. The expansion will increase throughput at the open-pit operation to 200,000 tonnes per day.

Under an agreement with mine’s majority owner, Freeport McMoRan Copper & Gold (FCX-N), Rio has the right to acquire a 40% interest in future mill expansions in exchange for partial funding and loans.