Rio intends to extract minerals from sludge at Kennecott copper mine

lRio Tinto intends to procure valuable minerals such as Tellurium from the sludge

lWith a “difficult” third quarter, extracting these minerals would be a challenge in terms of cost.

Anglo-Australian mining firm Rio Tinto isn’t relying on strained supply chains and instead is going to produce its raw materials, starting from mining sludge from a giant copper pit in Western U.S.

On Monday, Wall Street Journal reported that Rio was building a plant at Kennecott mine near Salt Lake City that would recover tellurium, a critical mineral used in solar panels, from ore that has been dug up for its copper. 

The report mentioned that waste produced at the mine contains a clutch of critical minerals that have long been overlooked by global miners in favor of copper and commodities that can be produced at scale and sold into markets with a deep pool of investors.

Amid the anxiety surrounding supply chain bottlenecks, geopolitical tensions, and disruptions in exporting to countries, minerals are becoming more valuable as the U.S. and its allies worry about the security of supply due to the pandemic and a power crunch. The U.S. relies on imports of tellurium, including from China, which dominates global production.

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Fading glory

Once the industry’s biggest mining operator, Rio’s third-quarter results tell a tale of the company’s struggle to maintain its glory. It cut down its production guidance for its iron ore business and other divisions after a “difficult” third quarter. The company also revealed another delay at its underground copper mine in Mongolia’s Gobi desert.

Rio’s share price has dropped after iron ore prices fell when China imposed production curbs on its steel industry. Rio has produced an increasing amount of lower grade iron ore after it decided to delay spending on new mines to replace aging pits, in 2013. In Q3, the company produced almost 9 million tonnes of this lower grade material, known as SP10.

Recovering the lost treasure

The Kennecott mine accounts for 20% of the U.S.’s copper supply. Rio Tinto intends to recover minerals other than copper when the ore is processed for copper as a first step before potentially recovering them from waste, known as tailings.

The other minerals are present in very small quantities which would prove to be a challenge for the companies as the cost of extracting these minerals would be higher.

CEO Jakob Stausholm said that the waste ponds at the Kennecott mine contain nearly half of the 35 critical minerals highly valued by the U.S. including bismuth, rhenium, and indium, which are needed for products including smartphones and medicines.

With 80% of its earnings generated by its vast iron ore business, the company is keen to diversify into other projects. It is working on a lithium project in Serbia. The company started producing battery-grade lithium from waste rock at a borates mine site in California. 

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With inputs from Wall Street Journal and Financial Times