Rio asks employees to take a break

Following last week’s landslip at Rio Tinto’s Bingham Canyon mine in Utah the company has asked employees to take vacation or unpaid leave.

Rio’s Kennecott Utah Copper unit said it has asked workers to volunteer to take leave because the operation isn't running at full capacity.

Exact details regarding the extent of damage caused by the wall collapse or the expected impact on production have been released.

Photographs of the incident show a significant chunk of the mine’s northeast wall has collapsed.

The miner has been monitoring ground movements over the past several months at the site and in anticipation began relocating buildings, roads and machinery.

No one was injured in the landslide.

The copper mine is one of the world’s largest mines and some analysts have predicted mining operations could be suspended for up to a year, The Australian reported.

If analysts are right Rio Tinto’s production and earnings could be affected.

BMO Research analyst Tony Robson said depending on how the company uses its stockpiles and low grade ore dumps, between 80,000 and 160,000 metric tonnes of copper output could be lost this year.

Rio Tinto’s Kennecott unit produces about 17 per cent of copper supplies in the US.

Last year the mine’s output was about 163,000 tonnes of refined copper plus 279,000 ounces of gold and about 9,400 tonnes of molybdenum, which is used as an alloy in steel.

In June the company moved to extend the life of the Bingham Canyon mine to 2029 from 2018, approving spending of $US660 million.

Using the assumption that Bingham production remains suspended the Commonwealth Bank said the mine would likely report a loss of $US79 million.

CBA had previously expected the mine to earn $US701 million this year, equating to about 6 per cent of Rio Tinto's total earnings.

"The slip has destroyed the main access decline into the pit, so a new decline will need to be constructed before mining can resume. We have no guidance from Rio on how long this will take, but we assume it will be months not weeks," the bank said in a research report.

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