The Rio Tinto Limited (ASX: RIO) share price is trading flat on Thursday morning despite a couple of positive news items.
At the time of writing, the mining giant’s shares are fetching $115.44.
What’s new for Rio Tinto?
The first bit of positive news this morning is that the spot iron ore price has continued its ascent.
According to CommSec, overnight the spot iron ore price climbed a further 0.5% to hit US$150.75 a tonne.
This means Rio Tinto’s iron ore operations are currently generating significant free cash flow, which bodes well for dividends.
What else is new?
Also of note for the mining giant’s shareholders is the release of an announcement relating to its Jadar operation in western Serbia.
That announcement reveals that Rio Tinto has declared its maiden ore reserve at the 100% owned lithium-borates project.
According to the release, the mineral resource comprises 55.2 Mt of indicated resource at 1.68% lithium oxide (Li2O) and 17.9% Boron trioxide (B2O3) with an additional 84.1 Mt of inferred resource at 1.84% Li2O and 12.6% B2O3.
This follows pre-feasibility studies which have shown that the Jadar project has the potential to produce both battery grade lithium carbonate and boric acid.
Management notes that the deposit is located on the doorstep of the European Union, one of the fastest growing electric vehicle (EV) markets in the world, and has the potential to provide lithium products into the EV value chain for decades.
It also points out that boric acid is a key raw material for advanced glass and fertiliser products and would be integrated with and complementary to Rio Tinto’s established position in this market.
In addition, the scale and high grade nature of the Jadar mineralisation provides the potential for a long life operation. One of which will be in the first quartile of the industry cost curve for both products.
The company revealed that the project moved into feasibility study at the end of July 2020. This was with an investment of almost $200 million on a scope that includes detailed engineering, land acquisition, workforce, and supply preparation for construction, permitting, and the early infrastructure development.
The feasibility study is expected to be complete at the end of 2021 and, if approved, construction could take up to four years.