Rio Tinto (ASX, LON, NYSE: RIO) plans to ramp up development of its Winu copper-gold project in Western Australia, with first production expected in 2023.
The world’s no. 2 miner continues drilling and geophysical testing at the asset, which could be its next major copper project, and is progressing discussions with landowners to keep moving forward.
Chief executive officer Jean-Sébastien Jacques said on Wednesday that the company’s job was to create options to meet market demand.
“A great example of one is Winu, our copper opportunity in Western Australia,” he said.
The Winu copper-gold-silver discovery is about 130 km (80 miles) from Newcrest’s Telfer copper-gold mine in the East Pilbara. It’s also close to numerous copper prospects discovered recently by juniors, and 350 km (220 miles) southeast of Port Hedland, the world’s largest bulk export port.
Rio has been investing heavily in copper in the past two years as it believes the market will soon go into deficit amid expectations that bigger power grids around the world and an electric-vehicle boom will boost demand, while supplies will remain constrained.
Chile, the world’s largest copper mining nation, has echoed the company’s outlook. In January, the state copper commission, Cochilco, said the anticipated global shortage of the metal would materialize this year, reaching about 22,000 tonnes. The agency cited a consumption increase paired with falling volumes of copper scrap processing as the most obvious causes.
Chief financial officer Jakob Stausholm confirmed on Wednesday Rio’s focus on the red metal, noting that most of the exploration expenditure was going towards the commodity.
In the past, analysts have questioned the mining giant’s ability to scale up its copper business quickly without making an expensive acquisition, especially after facing challenges at key assets.
Rio had to delay first production from the $5.3 billion underground expansion of its Oyu Tolgoi copper-gold-silver mine in Mongolia. Originally scheduled for early 2020, it’s now expected to happen in the third quarter of 2021.
Rio also decided to sell its interest in the Grasberg mine in Indonesia, the world’s second-biggest copper mine, as part of a deal that put an end to years of disagreements between operator Freeport McMoRan (NYSE:FCX) and the country’s government.
Demonstrating an increased interest in new discoveries, last year, it invested a further $302 million to advance its Resolution copper project in Arizona and has been advancing other copper projects, such as the Citadel project with Antipa Minerals (ASX:AZY) in Western Australia, and Berenguela, in south-eastern Peru. Rio has also applied for exploration permits in northern Chile.