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Besides copper, the Bingham Canyon Mine is about to become a major supplier of molybdenum and rhenium.
Rio Tinto, parent company of mine operator Kennecott Utah Copper, announced Wednesday that it will invest $270 million into a molybdenum autoclave process (MAP) facility. The pres- surized heating facility will improve Kennecott's ability to extract molybdenum, a by-product of copper production. Molybdenum is used in metal alloys, such as steel, and in oil-refining catalysts that remove sulphur from fuel and improve air quality.
A secondary product that will be captured in the facility is rhenium, an element often added to tungsten and molybdenum-based alloys. It is widely used in photographers' flash lamps and in filaments for mass spectrographs and ion gauges.
"This capital investment will prove to be a tremendous future benefit to Rio Tinto," said Bret Clayton, chief executive of Rio Tinto's Copper Group. "MAP will provide significant financial upside and allow us to use energy more efficiently, enhancing our environmental stewardship."
Project manager Doug Stauffer said the facility will be built in the industrial complex at the northern end of the Oquirrh Mountains, between Kennecott's smelter and refinery. Construction should begin late this year, with operations scheduled to start in the fall of 2010.
Stauffer said the facility will encompass several buildings and will employ dozens of people, including some new hires.
"We haven't come up with a final number. It will be less than 100, but at least dozens," he added. "It's a large investment. It adds value to the company. It allows us to extract additional resource from the current mining operation. It's a good project from many viewpoints."
In a statement, Rio Tinto Chief Executive Tom Albanese said the investment was justified by growing global demand for molybdenum, "driven by the rapid urbanization and industrialization of China and India."
With molybdenum prices ranging between $32 and $34.50 per pound in the past year, Albanese said its production has been important to the profitability of Rio Tinto's Copper Group, a value that will be enhanced by the new facility.
Removing rhenium also should be lucrative.
Albanese said there is a "high-margin market" for the element, with an average spot price of $4,300 per pound in the last year.
The facility is expected to produce up to 9,000 pounds of rhenium annually.
Albanese emphasized that energy conservation features also have been designed into the facility, including a system for recovering excess steam that can be used in other company extraction processes.
This recycling system will supply about 40 percent of the plant's thermal requirements and emit significantly less sulphur dioxide and carbon dioxide, he added.
In the past three years, Rio Tinto has announced three sizable investments into Kennecott Utah Copper:
* $82 million to expand and modernize the bulk flotation process at the Copperton Concentrator. The project is in start-up phase.
* $73 million to acquire new mining equipment to accelerate excavation in Bingham Canyon Mine and provide options for future mine extensions.
* $270 million to build an autoclave process facility to remove more molybdenum and rhenium from copper-bearing materials removed from the mine.