Rio Tinto has given the first glimpse of the scale of its proposed Winu copper mine in Western Australia’s Pilbara, filing environmental approval documents for a 7 million tonne a year operation after pumping $122m into Winu, as the resources giant pushes to get the discovery into construction by mid-2021.
Environmental approval documents for the Winu project confirms previous comments from the mining giant that it plans a quick start to mining at the discovery, made only three years ago, in the hope of building a spoke-and-hub project capable of processing materials discovered on Rio’s extensive tenement base in the Pilbara’s Paterson province.
The documents outline early-stage plans to build a single open pit mine, with a centralised mineral processing facility, power plant and an air strip capable of taking a commercial jumbo jet full of FIFO workers.
While Rio notes its plans are subject to change as feasibility studies progress at Winu, it says it is initially targeting a 7 million tonne a year mining rate at the project “subject to change as the project progresses”.
“The current evaluation study has identified a potentially viable mining operation that would produce a copper/gold concentrate to be transported by road to Port Hedland for export,” the documents say.
“The proponent seeks to progress expeditiously through the evaluation and implementation phases to bring a viable project into production in 2023.”
“First ore production is planned in 2023. Construction is planned to commence immediately all required approvals are secured, which is scheduled in the second quarter of 2021. Some early works might commence (subject to approvals or exemptions) in the first quarter of 2021.”
The company is yet to announce an official resource for the project, Rio is due to deliver its June quarter production report on Friday, but has generally saved detailed commentary on emerging projects for its half and full-year financial reports.
The fact the company is pushing ahead with its environmental approvals for the project suggests an estimate of the size of the deposit is close to finalisation.
Separately, regulatory filings show Rio is still pumping money into the project, with documents filed with the Australian Securities and Investments Commission showing Rio Tinto Winu Pty Ltd issued $122m worth of shares to its parent Rio Tinto Limited in late May.
The purpose of the share issue is not outlined in the documents, but suggests Rio is accelerating development spending at the project. Previous disclosures to the WA Mines department indicate Rio spent $79.6m on the project in the 12 months to October 2019 on exploration at Winu.
The size of the mine flagged by Rio seems unlikely to impress the market, even though the company has long said it expects to start the development relatively small, hoping to build to a district-scale operation processing ore from multiple deposits in the region.
Outgoing exploration and development boss Steve McIntosh made that case at last year’s Diggers and Dealers conference, saying many of Rio’s top tier assets started small.
“It is important with Winu that we look for a case that is bankable, relatively low capital and low risk,” he said.
The need to remove waste ore indicates Rio will process far less than 7 million tonnes of ore each year, suggesting the deposit will struggle to move the dial on Rio’s annual copper production, tipped at 475,000 to 520,000t in 2020.
The strip ratio of the mine and it’s grade will not be clear until Rio releases a resource and mine plan, but even at relatively friendly waste-to-ore ratios and a healthy copper grade of about 1 per cent Winu might struggle to produce more than 50,000t a year of copper under the mining rates disclosed so far.
Outlining firm plans for Winu’s development could be the last hurrah for Mr McIntosh, who leaves Rio in October after 30 years of service to the mining giant.
Rio shares closed up $3.73, or 3.6 per cent, to $104.98 on Wednesday.
Source: The Australian
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