Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
Rio Tinto (ASX, LON, NYSE: RIO) has cut its refined copper production target for fiscal 2020 due to delays in restarting a smelter at its Kennecott mine in Utah.
The world’s second-largest miner expects the facility to be running again in two months. That would mean about 30,000 tonnes of lost production.
Rio now expects full-year refined copper production for Kennecott to be between 135,000 and 175,000 tonnes, down from a previous range of 165,000-205,000 tonnes.
The company’s copper output fell by 5% last year to 577,000 tonnes, largely blamed on low grades at Kennecott.
Rio now expects production guidance for refined copper at Kennecott to be between 135-175kt, down from a previous range of 165-205kt.
Rio churned out 186,800 tonnes of copper at Kennecott last year and it has approved an investment of $1.5 billion over the next six years to continue production at the mine.
The miner has been investing heavily in the red metal over the past two years. It believes the market will soon go into deficit as bigger power grids around the world and an electric-vehicle boom will boost demand, while supplies will remain constrained.
Rio allocated $302 million to advance its Resolution copper project in Arizona last year. It has also made progress at other copper projects, including Berenguela, in south-eastern Peru, and applied for exploration permits in northern Chile.
In April, the mining giant announced it would spend a further A$9.2 million ($6.6m) on exploration at the Citadel copper-gold project, a joint venture with junior Antipa Minerals (ASX: AZY), in Western Australia’s Paterson Province.
The earmarked budget for this year was well above the previous commitment of A$2 million put forth in January, when Rio earned 51% of the project, Antipa said in a media statement.
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 delayed 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 is now expected to happen in the third quarter of 2021.
The mining giant said that, as a result, copper and gold output would drop at the already troubled operation.
