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Rio Tinto to invest $270 million in molybdenum in the US
By Perrine Faye - Deputy Chief Correspondent, perrine@minormetals.com (+44 (0)20 7929 6339)
London, 11 June 2008 - Rio Tinto announced on Wednesday that it would invest $270 million in the construction of a new Molybdenum Autoclave Process (MAP) facility in Salt Lake City as the profitability of this copper- by-product is set to increase amid a strong demand outlook.
The new plant, located at Rio Tinto's Kennecott Utah Copper (KUC) Bingham Canyon operation, is scheduled to begin operating in the third quarter of 2010. It will enable lower-grade concentrate to be processed more efficiently than conventional roasters, allow improved molybdenum recovery and operating flexibility and enable production of chemical grade molybdenum products, it said in a release.
"The outlook for molybdenum demand is very strong, driven by the rapid urbanisation and industrialisation of China and India. KUC is one of the world’s lowest cost producers of copper, and molybdenum and gold production at Bingham Canyon are major contributors to this position," Tom Albanese, chief executive of Rio Tinto, said.
Molybdenum has been a major contributor to the profitability of Rio Tinto’s Copper Group in recent years and is likely to continue to be in the future, the group added.
The investment will enable Rio Tinto to increase revenue, expand molybdenum production, simplify operations, provide flexibility in mine planning and contribute to its sustainable development initiatives, it said.
Molybdenum is a by-product of copper production and is used in metal alloys, including steel, to enhance toughness, high temperature strength and corrosion resistance. It is also a key component in oil refining catalysts used to remove sulphur from fuel and improve air quality.
The new molybdenum facility will also make it possible for Rio Tinto to recover rhenium from its concentrate and become a secure long-term supplier. This is a high-margin market where the average spot price in the last three months was $4,300 per pound. The facility will have capacity to produce up to 9,000 lbs of rhenium per year.
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