Renewed vigour in Africa
Ploughing money into both old and new ventures
SOUTH AFRICA’S MAIN copper producer – Palabora Mining (Palamin) – could get a new lease on life if controlling shareholder, Rio Tinto, decides to extend the existing underground “block caving” operation. That emerged during a media trip to three of Rio Tinto’s African operations: Palamin, Rössing Uranium (Namibia) and QIT Madagascar Minerals (QMM), its heavy mineral sands mine in southern Madagascar.
The trip – which included South African, Australian and British financial media – allowed the SA press its first good look at Rio Tinto’s southern African operations in more than a decade, during which the group has kept a low profile. Reasons for that appear to include the operating and financial problems at Palamin, which initially made heavy weather of the switch from open pit mining to underground block caving.
Rio Tinto CEO Tom Albanese pointed out block caving technology is now proven and described Palamin as “probably the most productive single shaft mine in the world, which is now operating at 10% above its design capacity”.
Albanese added that the expertise gained at Palamin will be put to good use throughout the group as various mines – such as the huge Argyle diamond mine in Western Australia – also introduce the block caving system that Palamin’s staff reckon is the cheapest underground mining system to operate.
Palamin’s management must decide by end-2009 whether to develop the next block caving stage about 350m below the existing operation if the mine is to keep production going at full output after 2014. It will take five years to develop the new block cave section but management declined to provide an estimated capital cost at this stage.
Its change in attitude towards publicity appears to reflect Rio Tinto’s renewed interest in Africa, as well as fitting in with management’s campaign to fight off the pre-conditional bid launched by rival BHP Billiton in November last year.
Albanese came straight to the point during question time at the initial briefing session at QMM. “BHP Billiton needs us more than we need them,” he said. Albanese