Rio Tinto Make Major Molybdenum Investment

Rio Tinto is to invest US$270 million in the construction of a new Molybdenum Autoclave Process (MAP) facility at its Kennecott Utah Copper (KUC) Bingham Canyon operation in Salt Lake City. This will enable lower-grade concentrate to be processed more efficiently than conventional roasters, allow improved molybdenum recovery and operating flexibility and enable production of chemical grade molybdenum products.

Tom Albanese, chief executive of Rio Tinto, said, "The outlook for molybdenum demand is very strong, driven by the rapid urbanisation and industrialisation of China and India. KUC is one of the world's lowest cost producers of copper, and molybdenum and gold production at Bingham Canyon are major contributors to this position."

Molybdenum is a by-product of copper production and is used in metal alloys, including steel, to enhance toughness, high temperature strength and corrosion resistance. It is also a key component in oil refining catalysts used to remove sulphur from fuel and improve air quality.

Molybdenum has been a major contributor to the profitability of Rio Tinto's Copper Group in recent years and is likely to continue to be in the future. The investment will enable Rio Tinto to increase revenue, expand molybdenum production, simplify operations, provide flexibility in mine planning and contribute to its sustainable development initiatives.

"This capital investment will prove to be a tremendous future benefit to Rio Tinto," said Bret Clayton, chief executive of Rio Tinto's Copper Group. "MAP will provide significant financial upside and allow us to use energy more efficiently, enhancing our environmental stewardship."

MAP will also make it possible for Rio Tinto to recover rhenium from its concentrate and become a secure long term supplier. This is a high-margin market where the average spot price in the last three months was US$4,300 per pound. The facility will have capacity to produce up to 9,000lbs of rhenium per year.

The MAP design includes a number of energy conservation features and an environmentally responsible technique for producing molybdenum products. A steam recovery system will be included to capture excess steam from the autoclave for use in downstream processes. This recycle system will supply about 40 percent of the plant's thermal requirements and emit significantly less sulphur dioxide and carbon dioxide by processing molybdenum concentrate through MAP.

MAP follows a series of investments to increase long term profitability and accelerate mining operations to meet global demand for natural resources. In 2006, an US$82 million investment was announced to expand and modernise the bulk flotation process at KUC's Copperton Concentrator. The project is substantially complete and in start up phase. Earlier this year, a US$73 million investment was agreed in mining equipment to accelerate mining activity at the Bingham Canyon Mine and provide options for future mine extensions.

The MAP facility is scheduled to begin operating in the third quarter of 2010.

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