In afternoon trade, the mining giant’s shares are down 1% to $126.25.
What did Rio Tinto announce?
The Rio Tinto share price is falling despite announcing the approval of a $108 million investment in underground development to enable early orebody access and undertake orebody characterisation studies for underground mining at the Kennecott copper operations in the United States.
According to the release, the investment builds on $25 million approved in early-2020 to complete a pre-feasibility study to determine the viability of underground mining operations at Kennecott. Management notes that potential underground mining would occur concurrently with open pit operations and result in increased copper output.
The company feels this investment is more than worthwhile. It notes that Kennecott holds the potential for a significant and attractive underground development, with declared Mineral Resources of 20 Mt at 3.65% copper and 1.62 g/t gold1 with further upside potential based on drilling.
Underground battery electric vehicles
The release explains that the company intends to trial underground battery electric vehicles at the project. It notes that these have the potential to reduce carbon emissions at Kennecott and across Rio Tinto’s global operations.
Sandvik Mining and Rock Solutions will supply a battery electric haul truck and loader to evaluate performance and suitability for future underground mining fleets.
Rio Tinto Copper’s Chief Executive, Bold Baatar, said: “Kennecott holds a range of options to extend our supply of copper and other critical materials, to meet the strong demand being driven by electric vehicles and renewable power technologies. The operation is uniquely positioned to supply these emerging markets, with one of only two operating smelters in the United States that also processes concentrates from third parties, a long history delivering high quality products and significant resources that are yet to be developed.”
Why is the Rio Tinto share price trading lower?
The weakness in the Rio Tinto share price today appears to be due to a pullback in iron ore prices.
According to CommSec, the spot iron ore price fell US$12.10 or 5.7% over night to US$201.50 per tonne. This was driven by reports that some Chinese provinces were told by the government to cut steel production.
The Rio Tinto share price is up 9.5% in 2021.