Performance
Group projects
The main Energy group coal development projects in Australia are the extension of the Kestrel mine and the construction of the new Clermont mine to replace the nearby Blair Athol mine that reaches the end of its life in 2012. Both projects are at an advanced stage of construction and have supply contracts in place. Due to the economic slowdown, work at Kestrel will be slowed in 2009 and consideration given to deferring capital expenditure at Clermont, which is due to start production in 2010.
Energy Resources of Australia (Rio Tinto: 68.4 per cent)
In September 2007 ERA announced an
extension to the Ranger open pit at a capital
cost of A$57 million to extend mining until
2012. The pushback, when combined with
optimisation of the existing pit, added an
additional 10.7 million pounds of contained
uranium oxide to reserves. The majority of
the additional production from the
extension is expected to occur in 2011.
Studies to examine options to further
expand the mine and increase production
from the processing plant continued in 2008.
Exploration and evaluation activity increased in 2008 with ERA spending US$13.7 million compared to US$11.8 million in 2007. The work focused on near mine extensions to the Ranger orebody. Due to this and other evaluation work ERA's resources at Ranger increased from 111 million pounds of contained uranium oxide to 254 million pounds.
Rössing Uranium (Rio Tinto: 68.6 per cent)
After years of operating below capacity
during a period of low uranium prices, in
December 2005 approval was granted to
restore annual production capacity to 8.8
million pounds per annum and extend the
life of the operation to 2020. Total
incremental and sustaining capital cost of
the expansion was US$112 million.
In 2008, drilling programmes were completed for numerous orebodies on the lease. The current programme is focused on proving up the main pit which remains open at depth. Rössing completed construction of and started test work on a trial column assembly for a heap leach pilot plant. Rössing also completed a conceptual layout for the full scale plant on the existing tailings dam.
Rio Tinto acquired a 15 per cent interest in Extract Resources Ltd., the company that owns the Rössing South deposit, and a 16 per cent interest in Kalahari Minerals plc. It is intended these interests will be sold to Rössing.
Extract has announced its maiden JORC compliant resource estimate based on the exploration results for the North Zone of Rössing South of 102 million tonnes at 460 parts per million which equates to 103 million pounds of contained metal.
Rössing will seek to negotiate a joint venture for the development of Rössing South with Extract Resources as this will provide optimal value to the shareholders of both Rössing and Extract Resources.
Rio Tinto Coal Australia Clermont (Rio Tinto: 50.1 per cent)
RTCA and its joint venture partners
approved additional investment of
US$475 million to bring total investment to
US$1,290 million for the development of the
Clermont thermal coal mine in central
Queensland. The additional costs covered
scope changes and cost inflation.
Clermont, which is situated 15 kilometres south east of the Blair Athol mine, will become one of Australia's largest thermal coal producer when it reaches full capacity, which is scheduled for 2013. The mine will be brought into production to replace Blair Athol, due to close in 2015, and will use Blair Athols' existing infrastructure and market position. To date construction has progressed slightly behind plan but with first coal production expected as planned in 2010.
Rio Tinto Coal Australia Kestrel (Rio Tinto: 80 per cent)
RTCA and its joint venture partners
approved investment of US$991 million for
the extension of the Kestrel mine. This
represents a 20 year investment in the
Bowen Basin of Queensland to help meet
Asian demand for metallurgical coal. Given
the late year global financial turmoil and
uncertainty in steel demand for 2009 and
beyond, output from the existing Kestrel
operation will be slowed in 2009.
Completion of the development project is
still expected in 2012.
Coal & Allied Mount Pleasant (Rio Tinto: 75.7 per cent of Coal & Allied - 100 per cent of Mount Pleasant)
In 2006, Coal & Allied started a feasibility
study on the Mount Pleasant coal mine
project located adjacent to the Bengalla coal
mine near Muswellbrook in the Hunter
Valley, NSW. With continued uncertainty
surrounding coal chain infrastructure in the
Hunter Valley, and weaker markets, a
decision to develop has been deferred.
Coal & Allied Lower Hunter Land (Rio Tinto: 75.7 per cent)
In 2006 Coal & Allied signed a
memorandum of understanding with the
NSW Government to facilitate the provision
of extensive land conservation corridors in
the Lower Hunter under a land offset
scheme. The remaining 20 per cent is being
considered for land development. Extensive
community consultation continued through
2008. Coal & Allied submitted concept plans
to the Government for the southern lands
in November 2007 and will do so for the
northern lands in early 2009. Government
approval of these plans is awaited.
Rio Tinto Energy America (Rio Tinto: 100 per cent)
During 2008, RTEA completed construction
and commissioning of the Jacobs Ranch
overland conveyor and in pit crusher project.
This has reduced emissions and operating
costs in addition to providing latent capacity
for expansion (from around 38 million
tonnes to over 45 million tonnes per annum).
QIT Madagascar Minerals (Rio Tinto 80 per cent)
The QMM project was approved in 2005 and
consists of the development of a mineral
sand mine and separation plant, and port
facilities in southern Madagascar as well as
an upgrade of QIT's ilmenite smelting
facilities in Canada.
The Government of Madagascar contributed US$35 million to the establishment of the port as part of its Growth Poles project funded by the World Bank. The project has adhered to its schedule; however, cost inflation and foreign exchange effects increased the cost to US$1.18 billion from the original estimate of US$1.03 billion. First ilmenite production occurred at the end of 2008.
The mine will be a key initial customer of the deep sea multi-use public port at Ehoala, providing the base load to help establish the port. Over time, it is expected the port will make an important contribution to economic development of the region.
RTIT will manage the port operations. At the end of the life of the mine, the port will come under the responsibility and control of the Government of Madagascar.
Extensive engagement and consultation with the Government of Madagascar, local people, and community leaders has taken place over many years. The World Bank is involved in a development role and non government organisations, including the Royal Botanic Gardens, Kew, Fauna and Flora International and Missouri Botanical Gardens have been involved in planning environmental and conservation strategies.
Kazan trona (Rio Tinto 100 per cent)
The Kazan trona project is located 35
kilometres northwest of Ankara in Turkey.
Rio Tinto completed pre-feasibility studies in
2008 but has now commenced divestment of
the project as soda ash is no longer
considered to be core to Rio Tinto's strategy.
