Last week’s landslide at one of its biggest copper mines could cut output by 100,000 tonnes this year, the world’s second largest mining company Rio Tinto said today.
The cave-in at Bingham Canyon mine in Utah happened last Wednesday. Production remains suspened and Rio said it is examining when it might be restarted.
Originally the miner had expected to produce 300,000 tonnes from Bingham Canyon this year but the landslip has turned out to be more extensive than first thought.
Ironically the shortfall on copper production could, according to some analysts, be enough to hold up the world copper price because the supply and demand for the metal is so closely balanced. Copper prices have fallen this year over fears that China’s economic growth is slowing.
Despite the Utah setback Rio’s new chief executive Sam Walsh declared that the mining group had got off to a solid start “recovering rapidly from the seasonal weather disruptions.”
He said that the group’s two major growth projects – major expansion of the iron ore mines at Pilabra in Australia and new gold and copper mines in Mogolia – had made good progress in the first quarter with production expected to start at both schemes this year. The compnay said it hoped it could commission its giant Oyu Tolgoi copper and gold mine in Mongolia by the end of June, pending resolution of outstanding issues with the Mongolian government over local employment and taxes.
Walsh, who replaced Tom Albanese as chief executive early this year, also emphasised that 2013 would be a year in which Rio concentrated on keeping costs down.
He said: “My streamlined executive committee structure is now in place and demanding targets for 2013, including for cash cost savings, are locked into our performance measures. We are making good progress in achieving our cost reduction targets and other priorities for 2013, and are determined in our pursuit of greater value for shareholders.”
Rio Tinto shares rose 48.5p to 3021.5p on the news.
