November 24, 2017

Palabora Mining Company’s Growth

Palabora Mining Company Limited is a member of the Rio Tinto Group of Companies, situated in the Ba-Phalaborwa area of Limpopo in South Africa, operating a large block cave copper mine and smelter complex .

Palabora Mining Company’s future will be determined by our ability to deliver on the current growth strategy. Critical to the business strategy are our plans to:

·         extend the life of mine by studying a Lift II underground mine expansion option and constructing decline ramps from Lift I to Lift II to meet thefuture construction schedule; and

·         growing magnetite exports through ensuring that the on-site production and logistics infrastructure is sized appropriately to support greater export volumes of highgrade magnetite; and review future options for downstreamcopper processing at Palabora.

Lift II

We accelerated and subsequently completed our pre-feasibility study for Lift II to meet the June 2012 schedule. The studyhas significantly enhanced our understanding of the optimal business and technical options for completing Lift I andtransitioning to Lift II. As part of the study we continuedtargeted exploration drilling to further inform the block model, providing deeper knowledge of the ore body as well as the most appropriate mine design going forward. Engineering design was completed to the required Pre-feasibility study (PFS) level.

Our twin heading decline development has progressed well and we continue to work towards meeting our targeted completion in Q2 2014. Associated airway development and infrastructure work is also progressing on schedule. The organisation associated with decline and infrastructure construction now exceeds 250 project personnel.

Keeping people safe each and every day is our key priority in this project and it is especially pleasing to be able to report that the safety performance of this team is improving constantly. The final quarter of 2012 was characterised by zero injuries and the overall annual performance was better than the benchmark against similar projects.


The business has been successfully pursuing magnetite expansion in recent years to benefit from market prices and export demand. In December 2011 the Palabora Board approved R128 million in capital spend to install a belt filter plant. The new plant will increase the production and drying capacity of magnetite in anticipation of continued trucking activities and the easing of rail constraints.

 Historically, we have taken magnetite from the existing processing plant and dried it on the magnetite stockpile in ponds through a process of evaporation. This gradual method, which is inherently slow and subject to the forces of nature, has limited the quantity of high-grade magnetite we can produce and export. The new plant will enable us to force-dry 6 Mt per annum to meet export needs. The belt-filter plant is due for commissioning in the first quarter of 2013.

The Board approved a further R170 million to upgrade the Magnetite Separation Plant. The plant will process and upgrade the magnetite from a 58 per cent iron oxide grade to 65 per cent magnetite grade. These projects combined form part of Palabora’s strategic growth plan to meet our 6 Mt annual target.

Our support for iron beneficiation projects in Palabora continuesand we are working closely with the IDC and IMBS Irontechnology company to see this become a reality. The third partyIMBS plant on our property is now well into the constructionphase and will initially take 80 kt of magnetite per annumeventually ramping up to 800 kt. This project will significantlyadvance the beneficiation agenda and ultimately benefit the communities of Ba-Phalaborwa.


Considerable work has been undertaken to assess future technical options regarding copper processing at Palabora. The Smelter requires a targeted engineering solution to maintain its full compliance with the new South African Air Quality Regulations (introduced in 2010), before the end of 2015. We have undertaken a comprehensive study in an attempt to understand future options for copper processing at Palabora.

We will continue to plan, assess and implement our growth projects in the year ahead. The road ahead will undoubtedly present challenges, expected and unexpected, but the strength of our collective abilities, and our experience and determination will ensure that we continue on the same successful path as 2012.

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