Rio Tinto Poised to Open 6 More Projects on the Yellow Dog Plains
Kennecott Minerals and its parent company, Rio Tinto, are looking to become a “top ten” nickel producer by opening up to 6 more projects near its Eagle Project.
According to Rio Tinto copper chief executive, Bret Clayton, “In 10 years’ time, Rio Tinto could rank in the top-10 nickel producers globally.” Since Rio Tinto’s projects on the Yellow Dog Plains represent one of only two of the company’s nickel investments worldwide, Rio Tinto is looking to the UP to boost the company into a top ten nickel producer.
With Michigan DEQ approval of its project, Rio Tinto is now beginning to express an interest, publicly, in its other projects on the Yellow Dog Plains. Clayton recently told the Sydney Morning Herald: "At Eagle we are also focused on six further adjacent prospects, which may give us the potential to extend the mine life beyond 30 years at its current scheduled production rate.”
Why is Rio Tinto looking to expand its nickel operations in the UP?
UP Nickel, which has more than tripled in demand over the past 5 years due to increased demand from Chinese steelmakers, is already slated for China’s burgeoning infrastructure and consumer base. According to Rio Tinto CEO, Tom Albanese, the Eagle investment will enable the company to supply nickel “the developing world is hungry for….we believe our exposure to the key metals and minerals demanded by these urbanizing economies means we are exceptionally well placed to capture value for shareholders.”
Earlier in the year, Rio Tinto chairman, Paul Skinner, noted that “Growth in China, which is critical to the demand outlook for many of our products, remains strong and well balanced.”
According to an August, 2007, presentation by Anthony Loo, Managing Director, Rio Tinto China, from 2000 to 2006 Rio Tinto’s sales to China have increased nearly 10-fold. Loo also notes Rio Tinto’s commitment to investing in the Chinese economy, predicting the company will “dramatically expand China procurement in 2007 and 2008.”
Rio Tinto, which has been selling its products to China since the early 1900s, may soon become a Chinese Government-owned company. Major Chinese steelmakers, such as Baosteel, have expressed frustration over a potential merger between Rio Tinto and another mining giant, Australian-based BHP-Billiton. In response, Baosteel’s chairman, Xu Lejiang, told the 21st Century Business Herald that he was considering a takeover bid of the company: “The possibility of a takeover plan going ahead is very big.” Baosteel, which is owned by the Chinese state, is possibly seeking assistance from the China Development Bank to assist in financing a possible takeover.