The Jadar project in Serbia is one of the world’s largest greenfield lithium projects. The scale and high-grade nature of the Jadar deposit provides the potential for a mine to supply lithium into the electric vehicle value chain for decades.
Jadar will produce battery-grade lithium carbonate, a critical mineral used in large scale batteries for electric vehicles and storing renewable energy. Once in operation, Jadar will be the largest source of European lithium supply for at least the next 15 years. In addition, Jadar will produce borates, which are needed for the development of renewable energy equipment such as solar panels and wind turbines.
In July 2021, we committed funding of US$2.4 billion to Jadar. We recognise that in progressing this project, we must listen to and respect the views of all stakeholders. We are committed to upholding the highest environmental standards and building sustainable futures for the communities we operate in. The project remains subject to receiving all relevant approvals, permits and licences and ongoing engagement with local communities, the Government of Serbia and civil society.
The proposed development will include an underground mine with associated infrastructure and equipment, including electric haul trucks, as well as a beneficiation chemical processing plant to produce battery-grade lithium carbonate.
The Feasibility Study and the EIA Studies are progressing. The next steps for the project are seeking an Exploitation Field Licence and receipt of regulatory approvals. Based on current estimates and subject to receiving all relevant approvals, permits and licences, first saleable production is expected to be no earlier than 2027.
In 2018 we approved funding for our $2.6 billion Gudai-Darri (Koodaideri) iron ore project – set to be our most intelligent mine. The first phase of Gudai-Darri will have a 43 million tonne annual capacity, underpinning production of the Pilbara Blend™. The project will incorporate a processing plant, associated infrastructure and a 166-kilometre rail line. Mining has begun and first production from the main plant is expected in the second quarter of 2022.
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 65% of Gudai-Darri's average electricity demand once operational. During peak operations, the plant will provide 100% of Gudai-Darri's electricity needs.
Oyu Tolgoi Underground
The Oyu Tolgoi copper mine in Mongolia is a world-class open pit mine and underground project. More than 80% of Oyu Tolgoi’s total value lies deep underground. We are building an underground mine complex, that will use block-caving mining techniques to extract the ore and transport it to the surface.
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 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 $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, 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 Fourth Quarter Operations Review, published 17 January 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.
The Resolution Copper project is a proposed underground copper mine in the Copper Triangle, approximately 60 miles east of Phoenix, Arizona, in the western United States.
Simandou contains one of the world’s largest and richest high-grade iron ore deposits, demand for which is increasing as steelmakers look to reduce carbon emissions. Simandou broadens our global portfolio of iron ore products and complements the long-term attractiveness of our Pilbara Blend™.
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 late 2017, we discovered copper-gold mineralisation at the Winu project in the Paterson Province in Western Australia.
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.
The Zulti South project remains on full suspension. We approved the $463 million investment (our share is $343 million) in April 2019 to sustain RBM’s current capacity and extend the life of the mine.
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.