LONDON (dpa-AFX) - Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) said that it has approved the next stage in the development of Richards Bay Minerals or RBM in South Africa through the construction of the Zulti South project.
The $463 million (Rio Tinto share $343 million) investment will sustain RBM's current capacity and extend mine life.
RBM currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility.
The company noted that Zulti North orebody grade is declining, hence the Zulti South mine is required to maintain the output of highmargin zircon and rutile, and provide sufficient ore to support TiO2 sales.
The Zulti South mine (Phase 1) will underpin RBM's supply of zircon and ilmenite over the life of mine.
Construction is scheduled to start in mid-2019, subject to the granting of all necessary permits, with first commercial production expected in late 2021.
The investment will be fully self-funded from RBM's cash flows, with no additional debt or recourse to Rio Tinto. The project is expected to deliver an internal rate of return of 24 per cent (Rio Tinto share).
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