The construction of an aluminium smelter at Coega in South Africa was a “viable opportunity” with power and the company was “all for” supporting the development of a power generation plant from its “attractive” energy-coal discovery in South Africa’s Limpopo province, Rio Tinto CEO Tom Albanese said on Tuesday.

Albanese told Mining Weekly Online – on a London conference call announcing record 73%-up first-half earnings before interest, tax, depreciation and amortisation of $11,4-billion – that Rio Tinto continued to be engaged in discussions with South Africa’s Eskom and the South African government on the aluminium smelter project.

“I wouldn’t want to pour cold water on it,” Albanese said, although he would have to see the necessary power plant being built and the necessary power lines being constructed to the smelter site.

“We recognise the importance of the project to the Port Elizabeth area, and I look forward to that power generation coming on line,” he added.

Albanese was also “all for” supporting the development of a power generation opportunity that could create a viable opportunity for Coega.

He said that Rio Tinto had discovered a one-billion-ton openpittable thermal coal project in northern Limpopo.

“I think that is an attractive project and perhaps that will be part of the South African energy solution. I would hope so,” he said in response to questions from Mining Weekly Online.

He said that strong underlying Chinese demand for aluminium would increase this year by 18% to 14,5-million tons. The reality had borne out an aluminium performance better than analysts’ forecasts at the time of the Rio Tinto/Alcan transaction, which was contracted to deliver synergies of $1,1-billion after tax from 2009.

He described Rio Tinto as being “in tremendous shape” with “excellent earnings momentum” and “record” investment.

Continuing with energy minerals, Albanese said that Rio Tinto had in Rössing uranium in western Namibia one of the largest uranium mines in the world, where expansion opportunities were being considered.

“We have been able to put more and more of that business into spot and high market, which has certainly improved the benefits,” he said of Rössing,” and "we would certainly look forward to considering expansion opportunities there".

However, it had to be recognised that, in Namibia, there were equivalent shortages of water and power that would need to be addressed as the company considered those opportunities.

“We do have teams hard at work at that,” he said.

On the Western Australian Premier announcing its intention to introduce a ban on uranium mining in the state, Albanese said that Rio Tinto was “very conscious” of the strategic implications of a “future world where carbon will be priced”.

He said uranium and nuclear power would be a key part of the solution, in addition to energy conservation, alternative energy and clean coal.

“But you can’t just step back and ignore uranium and ignore nuclear. That is why, as the second-largest producer of uranium in the world, we are very upbeat about the forward look of that business,” Albanese said.

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