Rio's Albanese Says May Double Uranium Output in Next Decade
Sunday, 5 August, 2007
by Tan Hwee Ann
Bloomberg
Rio plans to expand its investments in uranium, rather than sell them to help fund its $38.1 billion bid to buy aluminum producer Alcan Inc., Chief Executive Officer Tom Albanese said in an interview broadcast today on Sky News.
Uranium has more than doubled in price in the past year as rising oil prices and concerns about global warming have prompted nations to seek alternative energy sources. London-based Rio in May said it was studying expanding its mines in Namibia and Australia.
``We're certainly investing in growing,'' Albanese said. ``We've flagged opportunities to potentially do as much as doubling over the next decade.''
Rio controls Energy Resources of Australia Ltd., producer of more than a 10th of the world's uranium, which is studying an extension of the life of the Ranger mine in the Northern Territory. It also wants to increase production at its Rossing mine in Namibia, and is studying restarting the Sweetwater operation in the U.S. Albanese didn't provide further details on the expansion plans.
Rio said July 18 that it produced 6 million pounds of uranium in the six months ended June 30, a 9 percent gain from a year before.
Uranium traded at $120 a pound in the spot market in the seven days to July 20, according to prices published by UX Consulting Co. of Roswell, Georgia.
Alcan, Pebble
Rio last month agreed to buy Alcan to become the world's largest aluminum producer, and said it may sell more than $10 billion of assets to fund the purchase.
Rio lost out on controlling the Pebble copper mine project in Alaska because it wasn't willing to match an investment by rival Anglo American Plc, Albanese also said today.
Anglo on Aug. 1 said it will invest $1.43 billion in Pebble, buying a 50 percent stake in the project from Northern Dynasty Minerals Ltd. Rio, which owns 21 percent of Northern Dynasty, said in its annual report that Pebble was a ``world-class'' copper deposit that was part of its growth plans.
``From our perspective, we will have a 10 percent interest in this project,'' said Albanese. Anglo ``saw an opportunity to make a fairly large investment in it, which was more than we were willing to do. We will compete, but we don't always necessarily win.''
Rio Tinto reported a 14 percent decline in first half profit last week, hurt by rising costs and falling production of copper and coal.
Costs, discounting inflation, energy price increases and new investment, rose by $240 million during the half, and the company wants to cut that, Albanese said.