Rio Tinto sees investment in new projects as substantially raising copper output

Rio Tinto sees investment in new projects as substantially raising copper output

	Published : Mon, 12 Mar 2007 01:37 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Rio Tinto's acquisition of interests in three promising copper projects have the potential to substantially add to the miner's copper output, according to the dual-listed Anglo-Australian group.

In its annual report, Rio Tinto said the investments will ensure that it remains a leading long term

supplier of copper.

For 2006, the copper group accounted for 49 pct or 3.562 bln usd of Rio Tinto's underlying net profit which totaled a record 7.338 bln usd.

In the report, chief executive Leigh Clifford said the acquisitions means Rio Tinto now has stakes in four world-class developed copper deposits.

During the past year Rio Tinto acquired stakes in the La Granja copper project in Peru, the Pebble project in Alaska and Oyu Tolgoi Hill in Mongolia, adding to stake already held in the Resolution copper project in the US.

Clifford, who retires on May 1, said the investment in Mongolia represents a phased, risk managed

entry into a potentially outstanding resource.

In October, Rio Tinto agreed to acquire a 20 pct stake in the 1.5 bln usd project which Canadian company Ivanhoe Mines Ltd is developing. It has an option to eventually move to a 40 pct interest.

Ivanhoe says the Oyu Tolgoi mining complex will eventually produce 1.6 bln pounds of copper a year - or about four pct of global output.

The deposit stretches over four kms and is the largest undeveloped copper project in the world.

Clifford said the 100 pct owned La Granja has been given the go ahead for a 95 mln usd pre-feasibility study but first production is at least seven years away.

Pebble in Alaska is another long term project still in its early stages.

The annual report said initial evaluations suggest the copper deposit may be even more promising than was originally thought.

In February this year Rio Tinto increased its interest in Northern Dynasty Minerals, which owns Pebble, to 19.8 pct.

At the 55 pct owned Resolution project in Arizona, Rio Tinto said preliminary shaft sinking will begin soon.

The deposit lies two kms below the surface is not expected to go into production before 2015 which Rio Tinto said is an indication of the long lead times for challenging projects.

Clifford said the group is also encouraged by the potential to find more uranium oxide on leases held by its Australian listed subsidiary, Energy Resources of Australia Ltd in Australia and the expansion possibilities at the RÃ¶ssing uranium project in the southern African state of Namibia.

'These, together with the potential of Kintyre in Western Australia and Sweetwater in Wyoming, mean we are well placed to extend uranium reserves and resources in the near future,' Clifford said.

He said Rio Tinto is spending 345 mln usd on exploration in 2006 as well and continuing to evaluate numerous development opportunities.

Clifford will be replaced by Tom Albanese, a 49-year-old American, who s one of Rio's three executive directors.

Over the years Albanese has held senior positions, including the chief executive of the group's industrial minerals and copper businesses and the head of exploration.

bruce.hextall@xfn.com