Name of the Project
Richards Bay Minerals – Zulti South project.

Location
KwaZulu-Natal, South Africa.

Project Owner/s
Rio Tinto and Richards Bay Minerals (RBM).

Project Description
The Zulti North orebody grade is declining. Subsequently, the Zulti South mine is required to maintain the output of high-margin zircon and rutile, and provide sufficient ore to support titanium dioxide sales.

Phase 1 of the Zulti South mine will underpin RBM’s supply of zircon and ilmenite over the life-of-mine.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project is expected to deliver an internal rate of return of 24% (Rio Tinto’s share).

Capital Expenditure
The project is estimated at $463-million (Rio Tinto’s share is $343-million). The investment will be fully self-funded from RBM’s cash flows, with no additional debt or recourse to Rio Tinto.

Planned Start/End Date
Construction began in the first half of 2019, but was then brought to a halt in December 2019 amid community unrest.

Latest Developments
The Zulti South project will remain on hold until the security problems that halted work two years ago are resolved.

RBM is in talks with the country’s authorities to permanently address violent protests around its operations before resuming work on the project, RBM MD Werner Duvenhage has said.

RBM was forced to halt work at the project in 2019 after a spate of community protests led to one employee being shot and injured. While security has improved and work continues at the rest of RMB’s operations, the company is still concerned about stability at Zulti South and does not know when work will resume.

“It is critical for the long-term sustainability of the entire business that we get Zulti South in operation as soon as we possibly can,”  Duvenhage has said.

The freezing of Zulti South weighs against President Cyril Ramaphosa’s efforts to attract new investment in the country.

Community protests around mines pertain to issues, from poor municipal services to labour conditions, and are often marred by violence. RBM has previously said the demonstrations are not related to the company.

While costs associated with the project’s delay are not yet significant, “there will be a time when it will probably be too late” to proceed with development, Duvenhage has said.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Rio Tinto investors relations (UK), John Smelt, tel +44 20 7781 1654.