Engineering & Mining Journal

OCT 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 17 of 91

REGIONAL NEWS - ASIA 16 E&MJ • OCTOBER 2018 Rio Tinto to Sell Interest in Grasberg to Inalum Rio Tinto has signed a binding agreement to sell its entire interest in the Grasberg mine in Indonesia to PT Indonesia Asahan Aluminium (Persero) (Inalum), Indonesia's state mining company, for $3.5 billion. Separately, Inalum has signed a binding agreement with Freeport McMoRan Inc. (FCX) in relation to the future ownership and operation of the Grasberg mine. "This agreement is a significant step toward the sale of our interest in Grasberg and provides further evidence of our com- mitment to strengthening the portfolio by selling non-core assets and driving high- er returns across the business," said Rio Tinto Chief Executive J.S. Jacques. The transaction and the Inalum and FCX transaction, which are intercondi- tional, are subject to a number of condi- tions, including the receipt of regulatory approvals. Both transactions are expected to occur in the first half of 2019. The proceeds of the sale are to be paid in cash to Rio Tinto at closing. Under the terms of the agreement, the Rio Tinto interests will be merged into PT-Freeport Indonesia (PT-FI) concurrent with Inalum's acquisition in exchange for a 40% share ownership in PT-FI. Following completion of the transac- tions, PT-FI will have an expanded asset base to include the Rio Tinto interests and Inalum's share ownership will be 51.2% of PT-FI and FCX's ownership will be 48.8%. Richard C. Adkerson, vice chairman of the board, president and CEO, said, "This step marks another significant milestone toward establishing a new long-term part- nership with the Republic of Indonesia to provide long-term stability for PT Freeport Indonesia's operations. We look forward to a mutually positive and beneficial part- nership with Inalum that will continue to provide substantial benefits to the people of Papua, the Republic of Indonesia, and to local employees, suppliers and con- tractors while generating attractive re- turns for our shareholders." FCX will continue to manage the oper- ations of PT-FI. The transaction is subject to certain conditions, including the extension and stability of PT-FI's long-term mining rights through 2041 in a form acceptable to FCX and Inalum; resolution of environ- mental regulatory matters satisfactory to the Indonesian government, FCX and In- alum; various other Indonesian regulato- ry actions and approvals; and customary approvals from international competition authorities. Myanmar Metals Eyeing Initial Pit Development in Myanmar Myanmar Metals has reported the results of a scoping study that supports develop- ment of an initial open pit, to be called the China pit, at its previously mined Bawdwin lead-silver-zinc-copper project in Shan state, northern Myanmar. Myan- mar Metals is an Australian company headquartered in West Perth, Western Australia. The China pit scoping study was prepared by CSA Global, also head- quartered in West Perth. Myanmar Metals has a 51% interest in the Bawdwin concession, with the re- mainder held under a production sharing agreement between Win Myint Mo In- dustries and Mining Enterprise No. 1, a Myanmar government business entity. The scoping study contemplates a maximum mining rate of 8.4 million mt/y of combined ore and waste, providing a nominal 1.8 million metric tons per year (mt/y) of plant feed to a coarse-grinding facility located at the Tiger Camp near the mine site. Average plant feed grades are estimated at 6% lead, 149.1 grams/mt silver, 3.1% zinc, and 0.2% copper. Myanmar Metals is assessing the op- timal location of a concentrator; however, the scoping study has assumed that slurry produced at the Tiger Camp facility will be transported via a 12-kilometer (km) pipeline to a concentrator in Namtu. Dif- ferential sulphide flotation would produce two concentrates, a clean zinc concen- trate and a combined lead-silver-copper concentrate. The study assumes that the products will be sold in concentrate form to Chi- nese smelters after being transported from Namtu via road approximately 250 km to the Chinese border town of Ruili, where a railhead is being developed. Life-of-mine metals recovered to con- centrate are estimated at 1 million mt of lead, 80.2 million oz of silver, 517,000 mt of zinc, and 30,000 mt of copper. Capital expenditures to develop the project are estimated at $191 million. Indonesia now as a majority stake in PT-FI and the Grasberg mine (above).

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