Mining giant Rio Tinto says the Brownfields expansion of the high-grade Silvergrass mine offers attractive returns, with an expected internal rate of return for this investment well in excess of 100% and a pay back of less than three years.
The investment will lower mine operating costs by replacing road haulage with a more efficient conveyor system that links the Silvergrass operations to the group’s existing processing plant at Nammuldi.
It is a key element in maintaining Rio Tinto’s premium Pilbara blend, and also delivers incremental tonnage and lower unit costs.
As anticipated by the company in its previous guidance, the Silvergrass investment adds 10 Mt of capacity.
Rio Tinto CEO Jean-Sébastien Jacques says that the company is committed to disciplined capital allocation and the approval of the final phase of the Silvergrass development.
“This is one of the most value-accretive projects across the mining industry that delivers high-quality and low-cost growth that will underpin future returns to shareholders.”
“The additional low-phosphorus tonnes that Silvergrass delivers will sustain the long-term viability of our Pilbara blend, ensuring continued premium pricing, whilst also lowering our operating costs through infrastructure improvements,” says Jacques.
Silvergrass is a satellite deposit located adjacent to Rio Tinto’s Nammuldi mine and is part of the Greater Nammuldi precinct, located approximately 70 k north-west of Tom Price.
The final phase of the Silvergrass development will replace the road haulage used in the NIT projects with a primary crusher and a 9 km conveyor to connect the Silvergrass mining area to the existing processing facilities at the company’s nearby Nammuldi operations.
Ore from the Silvergrass mining operations is high-quality, low-phosphorus Marra Mamba ore that is treated at the Greater Nammuldi processing plant and blended into Rio Tinto’s premium Pilbara blend product.
Silvergrass is a wholly-owned operation conducted under the Iron Ore (Hamersley Range) Agreement Act 1963.