Rio Tinto (ASX: RIO) has announced that it’s going to invest $1.5 billion to continue production at Kennecott copper to 2032.
Rio Tinto’s origins date back more than 145 years, but today it is one of world’s largest aluminium and iron ore producers, with much of its sales revenue coming from its operates in Western Australia. It also owns, fully or partly, mining projects for copper, diamonds, uranium and other minerals.
Rio Tinto’s Large Investment
The mining giant announced this morning that it has approved a $1.5 billion investment (100% basis) to continue production at its Kennecott copper operation in the US.
The company described the project as a world class project which is high value and low risk that will generate attractive returns, and allow further exploration of the deposit and options for mine life extension.
The money will be invested over the next six years to extend operations at Kennecott for the next 12 years to 2032.
What Will The Money Be Spent On?
It will further extend strip waste rock mining and support additional infrastructure development in the second phase of the South Wall Project, to allow mining to continue into a new area of the ore body and produce around one million tonnes of refined copper between 2026 and 2032.
The investment will start in 2020 and was included in its total capital expenditure guidance of $7 billion in 2020 and $6.5 billion in both 2021 & 2022 as development capital.
Including the new money being invested, Rio Tinto will have put more than $5 billion into the modernisation, environmental stewardship and mine-life extension since the Kennecott acquisition in 1989.
Rio Tinto CEO J-S Jacques said: “The outlook for copper is attractive, with strong growth in demand driven by its use in electric vehicles and renewable power technologies, and declining grades and closures at existing mines impacting supply.
“Kennecott is uniquely positioned to meet strong demand in the US and delivers almost 20% of the country’s copper production. North American manufacturers have relied on high quality products from Kennecott for the past century and this investment means it will continue to be a source of essential materials into the next decade.”
Rio Tinto also said that the continuation of the mining would be done with a significantly reduced carbon footprint.
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.