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Rio Tinto Group, the world's third-largest mining company, has finally put a price tag on its proposed expansion of Kennecott Utah Copper's Bingham Canyon mine, and it is well over half a billion dollars.
London-based Rio Tinto said it intends to invest $660 million to extend the life of its Utah open-pit copper mine by 11 years through to 2029.
But that may be only part of what it ends up spending in Utah to ensure that the mine has nearly two more decades of profitable operations before it.
"The $660 million doesn't include all of the pieces of the project we've been talking about in public," said Justin Jones, spokesman for Kennecott. "It's just for the activities at the mine itself."
For example, Kennecott anticipates it will be investing hundreds of millions of dollars in its power plant and other facilities that aren't directly related to the mine. And some of those projects already are under way.
Kennecott announced in August 2010 that it was laying plans for a major expansion of the mine that promised to further solidify the century-long status of the Bingham Canyon property as one of the state's main economic engines.
The plan calls for Kennecott to "push back" the south wall of its mine by about 1,000 feet so miners can deepen the massive pit by another 300 feet and reach an additional 700 million tons of copper ore.
Absent the expansion, the company said it would have to begin winding down operations starting in 2016 and gradually lay off its roughly 2,400 workers as the end of copper production approached in 2021.
"Kennecott has a great history in Utah, and this mine expansion offers an opportunity for us to continue producing about a quarter of the country's copper for years to come," Kennecott CEO Kelly Sanders said at the time.
The additional spending over the next seven years will allow average annual production of 180,000 metric tons of copper, 185,000 ounces of gold and 13,800 tons of molybdenum from 2019 to 2029, London-based Rio Tinto said in a statement.
At current prices, the value of that production would be well over $2 billion a year.
Moreover, Kennecott already is looking past 2029 to see what it might take to extend the life of the Bingham Canyon mine even more.
"We continue to evaluate underground options that will further extend the life of Bingham Canyon, which has already been in operation for more than 100 years," said Andrew Harding, CEO of Rio Tinto's copper unit.
The planned expansion, which still needs to get a number of environmental permits to move forward, is expected to give a major boost to the state's economy.
In 2010, Pam Perlich at the Bureau of Economic and Business Research at the University of Utah estimated that Kennecott operations support as many as 17,700 jobs in the state. And Perlich, the bureau's senior research economist, projected at that time that if the proposed Bingham Canyon mine expansion went forward, that number could grow to as many as 23,000 jobs.
Tribune reporter Judy Fahys and Bloomberg News contributed to this story