A second underground portal and smelter overhaul could extend the life of the 120-year-old mine.
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Kennecott Mine in Utah on the west side of Salt Lake County receives a $918 million investment to extend mine life as electrification increases copper demand.
Kennecott’s owner, Australia-based Rio Tinto, announced it will spend US$498 million to develop an underground mine in an area called the “North Rim Skarn” from which the company will earn 250,000 over the next decade tons of copper. At today’s copper price of about $3.80 per pound, that would be $1.9 billion in copper. The mine also produces smaller amounts of other minerals.
After more than a century of mining what was once the world’s largest open pit mine, Kennecott began underground mining in the Lower Commercial Skarn last year. The Company also continues to produce open pit copper ore.
In accordance with Australian law, Rio Tinto has characterized the copper in the North Rim Skarn as ‘Inferred’ meaning the Company expects to find sufficient copper, but this has not yet been confirmed. “There is no certainty that further exploration work will result in the determination of the Indicated Mineral Resources or that the production target itself will be met,” the Company said in its press release.
The investment could also extend the mine life beyond the current 2032 estimate, said Clayton Walker, chief operating officer of Rio Tinto’s copper division. “We’re working on extending it to 2050, but we don’t have all the data on that yet.”
The mine opened in 1904 and has been the backbone of the state for more than a century, employing generations of workers. Walker estimated that Kennecott’s operations contribute approximately $1.4 billion to Utah’s economy annually.
However, due to the large quantities of toxic materials produced, the mine and smelter have also raised concerns from environmental groups. The country’s only other copper smelter is located in Globe, Arizona, far from Arizona’s population centers.
Like the first underground mine, the new mine will use battery-powered mining equipment. The huge vehicles have removable batteries so they can be swapped out without charging delays.
Underground mining costs more than pit mining, but this cost is offset by higher grade ore. While ore mined at surface contains approximately 1% copper, underground ore is expected to contain 2% or more copper.
Rio Tinto is also spending another $300 million on what it says is the largest remodel of its Magna smelter in history. And another $120 million will be spent on upgrading the refinery’s copper-from-solution tankhouse and its “molybdenum flotation circuit.” Molybdenum, used in steel alloys, is one of several minerals Kennecott recovers from its ore, along with copper.
The mine and smelter also produce gold and silver, and Kennecott has recently started producing tellurium, an element used in solar panels. The company also produces and sells sulfuric acid to industrial customers, Walker said.
This investment comes on top of a $1.5 billion investment the company made in 2019. Walker pointed out that electric cars require about four times more copper than an internal combustion engine vehicle, which has made it a key material in the clean energy transition. The mine supplies about one-eighth of the copper consumed in the United States.
Kennecott is also the largest producer of toxic chemicals in the state, according to the EPA’s Toxic Release Inventory. The mine and smelter combined generated more than 175,000 pounds of toxic chemicals, mostly copper and lead compounds, in 2021, which are found in the company’s landfills.
“HEAL Utah recognizes that important minerals will play a role in our clean energy transition,” said Meisei Gonzalez, communications director for the Health Environmental Alliance of Utah (HEAL Utah). “However, we cannot ignore the environmental and social impacts of mining these materials. It is important that companies like Rio Tinto prioritize transparency, consent and accountability in their practices to avoid further social and environmental crises in the future.”