What is Kennecott's production footprint?

Kennecott produces about 15-20% of the US domestic refined copper supply. In 2023, refined copper output was lower due to a 115-day planned smelter shut down. For 2024, we aim to produce around 173,000 t refined copper. We are progressing well, with the smelter fully operational and refined copper production on target. We are proud of Kennecott as an example of responsible mining, especially being near a metropolitan area of nearly 1.5 million people, and are committed to mining the right way, partnering with the community beyond our gates.

How will the North Rim Skarn (NRS) expand Kennecott’s underground operations?

In 2023, Rio Tinto invested US$498 million to begin developing the NRS ore body. The NRS has updated Indicated Mineral Resources of 10.8  million t at 2.93 % copper, 1.20 g/t gold, 65.97 g/t silver, 0.008 % molybdenum, and Inferred Mineral Resources of 7.7 million t at 3.13 % copper, 0.96 g/t gold, 18.41 g/t silver, and 0.005 % molybdenum identified based on additional drilling and an initial Probable Ore Reserve of 3.0 million t at 2.39 % copper, 1.77 g/t gold, 18.59 g/t silver, and 0.010 % molybdenum.  Production from the NRS is expected to ramp up over two years, to deliver around 250,000 t of additional mined copper over the next 10 years alongside open cut operations. We are on track and excited about the higher-grade ore this underground project promises, which complements our open-pit operations, where ore grades have been declining after 120 years of mining.

What is the strategic advantage of operating a domestic copper smelter? 

There were up to 15 operating copper smelters in the US throughout the 60’s, 70’s and 80’s compared to today, with only two smelters in operation, Kennecott and Freeport’s Miami smelter. The US imports approximately 50% of its refined copper, a figure expected to rise to 70% in the next 10-15 years. Rio Tinto views our smelter as a strategic asset, allowing the US to process copper domestically instead of exporting concentrate. This was a key reason for Rio Tinto’s US$300 million investment for the rebuild, ensuring stable operations to meet market demand. A major challenge is the shortage of experienced copper smelting talent, both locally and globally. To address this, Rio Tinto and Kennecott are focused on developing internal talent through partnerships with universities, talent exchanges, and strategic recruitment. 

How will renewable diesel and BEVs help Kennecott progress towards carbon neutrality?

Switching to renewable diesel for surface operations at Kennecott is a significant step towards net carbon neutrality. Following successful trials at Rio Tinto’s Boron operation, we quickly transitioned to renewable diesel and are now at 95%, aiming for 100% in September 2024. This change, along with shutting down our coal-fired power plant in 2018, has reduced our carbon emissions by 80%.

In the underground space, our goal is to build a diesel-free operation, partnering with Sandvik. 

What is the Kennecott’s Tellurium footprint?

Tellurium is a critical mineral, defined as such when a nation imports around 70% of its supply. It is essential in manufacturing solar panels. Kennecott began producing tellurium in 2021. We produce about 20 t/y, accounting for 3% of the global market. Our ability to extract tellurium from our waste stream is a significant achievement, helping maximize our ore body, with plans to explore 5-6 other critical minerals like germanium and gallium. 

What are the firm’s goals for the next two years?

Our top priority is health and safety, ensuring our people have everything they need to succeed. This includes investing in our operators, maintainers, and technical staff across the mine, concentrator, smelter, refinery, and tailings facility. Another key focus is successfully ramping up our underground operations, which are crucial for our future expansion plans. We are exploring ways to extend mine life beyond 2032. Over the next 24 months, we aim to make compelling investment decisions to extend this timeline, particularly given the strong state of the copper market. Our priorities are safety, people, and exploring growth opportunities for Kennecott's future.