Rio Tinto (ASX: RIO) is strengthening its position in the U.S. copper supply chain by investing in its Kennecott mine near Salt Lake City, Utah. Underground production will be increased, and the health of key assets will be improved.
The company has approved spending US$498 million for underground development and infrastructure for an area known as he North Rim Skarn. Production will begin in 2024 and will ramp up over two years, eventually delivering about 240,000 tonnes of copper over 10 years alongside open pit operations. This plan is in part underpinned by inferred resources, so Rio was careful to say in its news release that the forecast carries notable risks.
In September 2022, Rio Tinto approved a capital budget of US$55 million to start underground mining in an area known as the Lower Commercial Skarn. Underground production began in February 2023, and the company expects to mine a total of around 30,000 tonnes of copper through 2027.
Both investments are made with the intention of electrifying the vehicle fleet, following a successful trial last year.
Nor are these the only large projects planned for Kennecott. Rio Tinto has also approved spending US$300 million to rebuild the smelter. The rebuild is the largest in the company’s history and got underway in May 2023. Another US$120 million will be invested to upgrade the refinery tank house structure and to update and automate the molybdenum flotation circuit.
Rio is studying the next potential phases of expanding underground production At the same time it is working to extend open pit production beyond 2032.
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