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

Location
KwaZulu-Natal, South Africa.

Project Owner/s
Rio Tinto and RBM.

Project Description
The Zulti North orebody grade is declining, with the Zulti South mine consequently 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 mineral sands project not being developed is already having a real impact, RBM MD Werner Duvenhage has said.

This is because RBM cannot fully use its smelting complex from a capacity perspective because ore grades in Zulti North, the current operating area, are declining.

“Just looking at Zulti North, probably from 2030 onwards, it wouldn’t make sense any more to run the smelting complex. We will have a couple of years after that . . . maybe. But from 2030 to 2033, we may be mining a little bit of sand still, but we won’t be able to run the smelter complex.

“If we add Zulti South, it extends the life by another 25 years, so [it is] very critical as we speak,” Duvenhage has said.

Although RBM’s key focus is on restarting its existing business, it believes going back to the conversation regarding Zulti South project is imperative.

The contribution of Zulti South to the South African economy over its 25-year mine life is estimated at R100-billion.

Even the communities and government have expressed their eagerness to engage in Zulti South discussions again.

Key Contracts, Suppliers and Consultants
None stated.

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