RIO Tinto on Monday approved the expansion of its 74% held Richards Bay Minerals (RBM), an industrial metals miner, representing new investment of $473m (R8.5bn).
The approval of the Zulti South project comes after six years of delays. Rio Tinto placed the project under a suspension in January 2020 amid violent community unrest so severe that a force majeure was placed on customer contracts at RBM. Eventually then Rio Tinto CEO Jakob Stausholm met with South African president Cyril Ramaphosa in an effort to bring calm to the region.
RBM currently operates four mines in the Zulti North lease area, a mineral separation plant and a smelting facility. The plant produces zircon and ilmenite which has a range of industrial uses in the North American, European and Asian markets RBM supplies. Ilmenite is used in paint pigment and ceramics.
In addition to community related violence, RBM has also struggled with a fallout among its empowerment partners. In 2023, RBM published the results of a review into its community trusts which found they fell short on a number of metrics, including a failure to benchmark trustee fees. Another deficiency was that community beneficiaries were ill-defined.
The trusts, formed in 2009 as part of RBM’s black economic empowerment plan, have been subject to a full High Court review.
Rio Tinto said today the development of Zulti South would ensure RBM’s operational continuity until about 2050. Construction will start this quarter and take 30 months to be complete with commercial production expected in the fourth quarter of 2028.
The first phase will support RBM’s supply of zircon and ilmenite, while the second phase will follow as part of the long-term development strategy, said Rio Tinto.
“This project is not about expansion; it represents our commitment to sustaining jobs and continuing to make a meaningful contribution to the province,” said Werner Duvenhage, MD of Rio Tinto Iron & Titanium Africa Operations & RBM.
China Harbour Engineering Company (CHEC) has been appointed as the EPC contractor for the construction of Zulti South. CHEC worked with Rio Tinto on the Simandou iron ore project in Guinea.
RBM is one of the non-core assets put on review by Rio Tinto’s newly appointed CEO Simon Trott in September. Trott is reported to regard the South African miner as “low-hanging fruit” given the current weak pricing of titanium minerals, and recent disappointing returns.
Reuters reported in October that Rio Tinto was considering offering non-core assets to Chinalco for the 11% stake the Chinese own in it, worth $12.8bn (A$19.75bn) currently.
