Projects

A large undeveloped mineral sands deposit in Inhambane, Mozambique, could be a valuable source of ilmenite. Ilmenite is a major source of titanium dioxide – predominantly used as a white pigment in products such as paints and paper.

We conducted exploration activities in relation to the Chilubane, Dongane and Jangamo mineral sands prospects in Mozambique – collectively known as the Mutamba Project – under a Memorandum of Understanding (MoU) with the Ministry of Mineral Resources and Energy of the Republic of Mozambique from 2015 to 2018. 

In line with this MoU, Rio Tinto and Savannah Resources Plc and AME East Africa Limited (a subsidiary of Savannah) agreed to establish the Mutamba Project Joint Venture to develop the resource.

In January 2022, the Oyu Tolgoi Board approved the beginning of underground mining operations, and the project fired the first and second drawbells of the Hugo North underground mine in June 2022. We expect sustainable underground production 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 fourth-largest copper mine 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 $7.06 billion, an increase of $0.3 billion against the 2020 Definitive Estimate, largely related to COVID-19 disruptions.

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.

Simandou broadens our global portfolio of iron ore products and complements the long-term attractiveness of our Pilbara Blend™. Our managed joint venture, Rio Tinto Simfer, holds the rights to the two southern blocks of the Simandou deposit (blocks 3 and 4).

On 27 July 2022, we announced the formation of La Compagnie du Transguinéen, a joint venture between the Government of Guinea, Winning Consortium Simandou (WCS) – the developer of the two northern blocks (blocks 1 and 2) – and Rio Tinto Simfer.

This milestone paves the way to progress the definitive joint venture arrangements and secure necessary financing to construct more than 600 kilometres of rail infrastructure spanning the length of the country, as well as port infrastructure on the coast of the Forécariah prefecture in Guinea. Rio Tinto Simfer, WCS and the Government of the Republic of Guinea are committed to co-developing the rail and port infrastructure in line with internationally recognised environmental, social and governance standards.

Ownership of the new infrastructure joint-venture company will be split between development partners, Simfer Jersey Ltd and WCS, each at 42.5% equity share, with the Government of the Republic of Guinea taking a 15% free carry equity stake.

The Rio Tinto Simfer joint venture comprises Simfer S.A., which develops the mine and in which the Government of Guinea holds 15% and Simfer Jersey Limited holds 85%. In turn, Simfer Jersey Limited, which co-develops the infrastructure with WCS, is owned by Chalco Iron Ore Holdings (CIOH) (47%) and Rio Tinto (53%). CIOH is currently owned by Chinalco (75%), Baowu (20%), China Rail Construction Corporation (CRCC) (2.5%) and China Harbour Engineering Company (CHEC) (2.5%).

“The incorporation of InfraCo with our partners underscores the importance of the Simandou resource in today's decarbonising world and its development will complement Rio Tinto's strong iron ore portfolio. It is also a very important moment for Guinea and for Guineans, for whom the project's southern infrastructure corridor has the potential to bring significant benefits for regional economic development by leveraging international project and ESG standards. We are most grateful to the Government of Guinea and WCS for their collaboration and look forward to making the promise of Simandou a reality.”

- Bold Baatar, Rio Tinto’s Executive Committee member in charge of the Simandou project and Chief Executive, Copper

Construction is expected to begin in early 2023 with first production anticipated in 2025. Western Range’s annual production capacity of 25 million tonnes of iron ore will help sustain production of the Pilbara Blend from our existing Paraburdoo mining hub.

The $2 billion development ($1.3 billion Rio Tinto share¹) includes construction of a primary crusher and an 18-kilometre conveyor system linking it to the existing Paraburdoo processing plant. The construction phase will support approximately 1,600 jobs with the mine requiring about 800 ongoing operational roles which are expected to be filled by existing workers transitioning from other sites in the Paraburdoo mining hub. Rio Tinto’s share of the capital costs are already included in the Group’s capital expenditure guidance of around $9-10 billion for each of 2023 and 2024.

The joint venture is subject to various conditions, including approvals from Rio Tinto shareholders, the Australian Government, Chinese Government regulatory agencies and the Western Australian Government.

¹ Rio Tinto share includes 100% of funding costs for Paraburdoo plant upgrades

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 are continuing our programme of work to supplement our understanding of the deposit and the environmental and cultural heritage impacts before submitting the regulatory approval requests. We also continue to strengthen our partnerships with Traditional Owners and advance agreement making.