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

Location
KwaZulu-Natal, South Africa.

Project Owner/s
Rio Tinto and Richards Bay Minerals (RBM).

Project Description
The Zulti North orebody grade is declining. Subsequently, the Zulti South mine is 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 project is fully permitted and fully funded, but is not being developed.

In April 2020, Mining Weekly reported RBM’s committing R1.5-million towards meeting the needs of its employees and the community during the Covid-19 crisis.

 On February 5, RBM MD Werner Duvenhage postulated, during a panel discussion at the virtually hosted Investing in African Mining Indaba 2021, that Zulti South’s challenges could potentially be resolved if approached in the same way as the Covid-19 crisis had been approached – collaboratively.

Panel discussion moderator White & Case partner Gary Felthun asked Duvenhage to outline the factors that were holding the Zulti South project back, and what needed be done to progress the project.

Duvenhage responded by stating that, over 25 years, the project would deliver a R100-billion of projected benefit to the South African economy.

“We all have the responsibility to ensure that the R100-billion value of the Zulti South project is allowed to help our economy. There needs to be collaboration all the way through. It shouldn’t stop at the issuing of the mining licence,” was Duvenhage's plea to the panel.

The project includes programmes that will result in developing local suppliers; bringing in black-owned-women businesses; promoting small, medium-sized and microenterprises; and advancing low-cost financing for suppliers.

Minerals Council South Africa CEO Roger Baxter expressed the hope that Zulti South could be unblocked, adding that more than R20-billion worth of projects were blocked in the short term because of regulatory hurdles.

Mining has more than 2 GW of mostly renewable-energy projects, but these were being held up by bureaucracy, he reiterated.

Key Contracts, Suppliers and Consultants
None stated.

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