The Rio Tinto Ltd (ASX: RIO) share price is on the slide on Wednesday.
In morning trade, the mining giant's shares are down 1.5% to $115.88.
Why is the Rio Tinto share price falling?
Investors have been selling down the Rio Tinto share price today amid broad market weakness, which has offset the release of a positive announcement.
According to the release, Rio Tinto has announced plans to invest in its Kennecott operation near Salt Lake City, Utah, to strengthen its supply of copper in the United States.
The investment will see the miner increase production from underground mining and improve the health of key assets.
A total of US$498 million (A$734 million) of funding has been approved to deliver underground development and infrastructure for an area known as the North Rim Skarn (NRS).
If all goes to plan, production from the NRS will commence in 2024 and is expected to ramp up over two years to deliver around 250,000 tonnes of additional mined copper over the next 10 years alongside open-cut operations.
This follows last year's approval of a US$55 million (A$81 million) investment to start underground mining in an area known as the Lower Commercial Skarn (LCS). Underground production within LCS started in February 2023 and is expected to deliver a total of around 30,000 tonnes of additional mined copper through the period to 2027.
Overall, management believes these two investments will support Kennecott in building a world-class underground mine that will leverage battery electric vehicle (BEV) technology.
Rio Tinto highlights that BEVs create a safer and healthier workplace for employees underground. They also increase the productivity of the mine and reduce emissions from operations.
Management commentary
Rio Tinto's Copper chief operating officer, Clayton Walker, said:
We are investing to build a world class underground mine at Kennecott and strengthen our processing facilities, to meet the growing demand for copper in the United States, a key material for domestic manufacturing and the energy transition.
This investment will position Kennecott to continue the strong contribution it has made as part of the Salt Lake Valley community for 120 years, injecting about US$1.5 billion annually to the local Utah economy.
