Rio Tinto to invest $1.5 billion into Kennecott Mine expansion
Utah’s Bingham Canyon copper mine will remain in operation longer than expected thanks to a $1.5 billion expansion program announced by Rio Tinto on Dec. 3.
Rio Tinto Plc. said the expansion will extend the life of the mine through 2032, with potential to keep the more-than-100-year mine operational beyond that point. The expansion is set to get underway in 2020.
Reuters reported that the move more than doubles the mining industry's recent investment in U.S. copper projects. “We like copper. We like the U.S.,” Rio Tinto Chief Executive Jean-Sebastien Jacques said in an interview. “If we had not taken this decision, our position in the U.S. market would be shrinking.”
“This is an attractive, high-value and low-risk investment that will ensure Kennecott produces copper and other critical materials to at least 2032,” said Jacques, adding that mine closures impacting supply are also a key factor in the expansion.
Once seen as a laggard in the global mining industry, U.S. copper deposits have drawn more than $1.1 billion in recent investments from small and large miners alike before Rio Tinto’s announcement. Much of that demand has been fueled by growth in electric vehicles and renewable power technologies.
The Kennecott mine on privately owned land produces nearly 20 percent of the U.S. copper production, as well as gold and silver. Rio Tinto operates one of three U.S. copper smelters at the site.
The investment will extend strip-waste rock mining and support additional infrastructure development in the second phase of what’s called the South Wall Pushback project so mining can continue into a new area of the ore body. It will result in delivering close to 1 Mt (1.1 million st) of refined copper between 2026 and 2032.
With this project, Rio Tinto has invested more than $5 billion in modernization, environmental stewardship and mine-life extension initiatives since it acquired Kennecott in 1989, according to a release by the company.
The first phase of the project is expected to be completed in 2021.
Rio Tinto has faced recent challenges in other parts of its copper portfolio. Its Mongolian copper mine project, Oyu Tolgoi, hit a major setback last month when lawmakers there approved plans to revise the terms of an agreement underpinning the multibillion-dollar development.
In Arizona, Rio Tinto’s Resolution underground copper project with BHP Group has spent years waiting for U.S. approval, though the permit logjam appears to be clearing.
Rio Tinto also said it’s working with U.S. government scientists to extract rhenium and tellurium — used in jet engines and military explosives — from Kennecott’s refiners and smelters.
In November, the company announced plans to invest $749 million into its iron ore operations in Australia.