Shifting sands: Rio Tinto to expand African operations
RIO Tinto has approved a $650-million expansion of its mineral sands operation in South Africa.
The Anglo-Australian mining giant has signed off on the construction of the Zulti South project to extend the lifespan of its Richards Bay Minerals operation.
Rio owns 74 per cent of the South African business.
It will chip in $US343 million ($480.8 million) to the total project cost of $US463 million.
The mine extension will help Richards Bay maintain its output of high-margin zircon and rutile as the ore body grade at the existing Zulti North lease area declines.
Construction on Zulti South is scheduled to start mid-year, subject to the granting of all necessary permits, with first commercial production expected in late 2021.
Richards Bay is South Africa’s largest mineral sands producer and currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility.
Rio said the Zulti South investment would be fully selffunded from Richards Bay’s cashflows.
“Rio Tinto has a long his
tory in South Africa and today’s investment underscores our commitment for the coming decades and beyond,” chief executive Jean-Sebastien Jacques said yesterday.
“Zulti South is one of the best undeveloped minerals sand deposits in the industry and will significantly extend RBM’s (Richards Bay Minerals) position as a world-class, first-quartile asset.”
Mineral sands are old beach, river or dune sands that contain concentrations of minerals that are useful for a variety of industrial purposes such as adding colour to paints and plastics, in welding wire, metal production and the ceramics industry.
The latest investment was unveiled as Rio’s annual tax transparency report showed it handed over $US3.2 billion ($4.2 billion) to the Australian taxman in 2018, its highest since the peak of the mining boom.
Rio also said it paid out $US1.45 billion in state government royalties and another $US666 million in state payroll taxes.
Shares in Rio have gained 30 per cent this year, breaking through the $100 per share mark to be sitting at a near 11year high.
Shares in the miner yesterday closed at $101.58.