Rio Tinto plans to reach first production at the Winu copper-gold project in Western Australia in 2023, and is progressing discussions with the Traditional Owners to achieve this.
The company continues drilling and geophysical testing on site, on top of nearly 140 kilometres that have been drilled.
Rio Tinto chief financial officer Jakob Stausholm said the company was heavily investing in the copper business, with most of its exploration expenditure going towards the commodity.
Company chief executive JS Jacques added that the company’s job was to create options which it could progress to meet market demand.
“A great example of one is Winu, our copper opportunity in Western Australia,” he said.
Rio Tinto expects its copper production to be impacted by lower grades this year, particularly at the Oyu Tolgoi project in Mongolia and the Kennecott operation in the United States.
The company predicted that it would achieve higher grades when the Southwall Pushback project at Kennecott was completed in early 2021.
Rio Tinto also experienced a 3 per cent decline in iron ore shipments from the Pilbara, Western Australia last year.
Weather disruptions, operational challenges and a fire at Rio Tinto’s Cape Lambert port trumped the company’s intention to slowly grow its shipments.
This led to higher cash unit costs across the group, according to Stausholm.
The performance was turned around when Rio Tinto’s iron ore production increased in the second half of 2019.
“We were able to run the system at an annualised run rate of approximately 340 million tonnes, reflecting the investment that we made in mine development,” Stausholm said.
“Most commodities declined in 2019 reflecting a weakening in the global economy.
“We however, in aggregate, had a positive impact from prices due to iron ore. The iron ore price benefitted from significant supply disruptions starting with the tragic incident in Brazil but also from very strong steel demand from China.
“Steel production, for the first time, exceeded one billion tonnes on an annualised basis.”
Although Rio Tinto’s iron ore books are full, the company expects to see short-term impacts from the coronavirus outbreak, such as in the supply chains and provision of services from Chinese suppliers, according to Jacques.
“As volatile as the current conditions are, Rio Tinto does well in tough times,” he said.
“Our strong balance sheet, world class assets and the quality of our relationships with our customers help us outperform in an uncertain world.”