Projects

In June 2022, we announced the production of first ore at Gudai-Darri. The mine’s commissioning and ramp-up is expected to increase our iron ore production volumes and improve our product mix from the Pilbara in the second half of 2022. We will continue to ramp up production from the mine through the remainder of 2022, and we expect to reach full capacity during 2023. We are also progressing a feasibility study to support an expansion of this new hub. 

In addition to technology already in use across Rio Tinto, such as autonomous trucks, trains and drills, the design of the Gudai-Darri mine uses an increased level of automation and digitisation, including advanced data analytics.

Significant innovations include a digital replica of the processing plant, accessible in real time by workers in the field, fully integrated mine automation and simulation systems, and an automated workshop. With more than 70 design innovations in scope, Gudai-Darri will set a benchmark for our industry in terms of automation and the use of data – making mining safer and more productive.

In early 2020, we secured funding approval for the development of a 34 megawatt, 105 hectare solar photovoltaic (PV) plant at our Gudai-Darri mine – an important step in reducing our carbon footprint in the Pilbara. The Solar PV plant will deliver approximately one third of Gudai-Darri's average electricity demand once operational. During peak operations, the plant will provide 100% of Gudai-Darri's electricity needs.

In January 2022, the Oyu Tolgoi Board approved the beginning of underground mining operations, with sustainable underground production expected in the first half of 2023.

At peak production, Oyu Tolgoi is expected to operate in the first quartile of the copper cash cost curve¹. Oyu Tolgoi is expected to produce around 500,000 tonnes of copper per year on average from 2028 to 2036 from the open pit and underground, and an average of around 350,000 tonnes for a further five years², compared to 163,000 tonnes in 2021³.

By 2030, Oyu Tolgoi is expected to be among the five largest copper mines in the world. It is a complex greenfield project comprising an underground block cave mine and copper concentrator as well as an open pit mine which has been successfully operating for almost ten years. It is one of the most modern, safe, sustainable and water-efficient operations globally, with a workforce which is more than 96% Mongolian. Since 2010, Oyu Tolgoi has spent $4.1 billion on national procurement, with total in-country spend of $13.4 billion, inclusive of taxes and salaries during the same period.

The capital forecast for the project is $6.925 billion, including $175 million of known COVID-19 impacts to the end of 2021⁴. Forecasted remaining underground capital expenditure is approximately $1.8 billion.

In the fourth quarter of 2021, site accommodation and staffing levels improved to between 60% and 70% of planned requirements. The project has achieved the conveyor to surface decline breakthrough and completed construction of Materials Handling System 1 with commissioning expected to be completed in the coming weeks.

In December 2021, the updated Resources and Reserves were registered in Mongolia in accordance with Mongolian regulations and approval from Mongolian authorities of the 2022 Annual Mine Plan was received. The updated Feasibility Study (OTFS20) has been submitted to the relevant governmental agencies of Mongolia.

¹ Wood Mackenzie copper equivalent cash cost curve (Q4 2021)

² The 500ktpa target (stated as recovered metal) for the Oyu Tolgoi underground and open pit mines is underpinned 17 per cent by Proved Ore Reserves and 83 per cent by Probable Ore Reserves for the years 2028-2036. The 350kpa production target for the following 5 years is underpinned 18 per cent by Proved Ore Reserves and 82 per cent by Probable Ore Reserves. These production targets have been scheduled from current mine designs by Competent Persons in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, 2012 Edition (the JORC code).

³ Rio Tinto Annual Results, published 23 February 2022.

⁴ These estimates exclude any impacts of delays to work schedules caused by restricted approved budgets over the second half of 2021. This impact, and the impact of any ongoing COVID impacts will be assessed following the commencement of underground operations with further updates provided to the market in due course. Panels 1 and 2 studies will be ongoing throughout 2022. Further study work is also underway to assess the extraction methodology and ultimate recovery of the Panel 0 recoverable pillars.

We continue to engage with key stakeholders in-country, including the Government of Guinea.

We remain committed to an inclusive partnership, seeking mutual and sustainable benefits by developing our project in line with international social and environmental standards.

A new drilling programme has commenced, and expressions of interest are being sourced for construction and early development works expected to be carried out in 2022.

The Simandou project operates under the Simfer joint venture where the Government of Guinea holds 15% and Simfer Jersey holds 85%. Simfer Jersey is owned by Chalco Iron Ore Holdings (CIOH) (47%) and Rio Tinto (53%). CIOH is owned by: Chinalco (75%), Baosteel Resources (20%), China Civil Engineering Construction Corporation (CCECC) (2.5%) and China Harbour Engineering Company (CHEC) (2.5%). This structure has been in place since 2017.

Rio Tinto and CIOH, which own 45.05% and 39.95% of Simandou, respectively, continue to work with the government of Guinea to explore options to realise value from the world-class Simandou iron ore deposit, as well as potential mechanisms for collaboration on infrastructure development.

In July 2020 we announced the maiden Resource at Winu, as well as the discovery of a new zone of gold dominant mineralisation nearby. Drilling results at Ngapakarra, about two kilometres east of Winu, provide further encouragement about the potential to develop multiple orebodies in the district. We have explored only a small percentage of our tenements in the Paterson region of Western Australia so far, which includes both our 100% owned tenements and joint ventures.

We continue to actively engage with the Traditional Owners and there has been progress towards securing consent to the Project Agreement in advance of submitting the necessary environmental and regulatory approvals. Drilling, fieldwork and study activities continue to progress.

RBM currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility. The Zulti South mine is expected to underpin RBM’s supply of zircon and ilmenite.