Rio Tinto's Resolution Copper Mine: U.S. Smelting Challenges and Global Operations Update

Rio Tinto is pushing forward with plans to open the Resolution Copper mine in Arizona by the early-to-mid 2030s, but the Anglo-Australian mining giant may be forced to export some of its copper concentrate overseas due to the increasingly difficult economics of domestic smelting. Senior executive Katie Jackson, who leads Rio's copper division, shared these insights at the CERAWeek by S&P Global conference in Houston.

Resolution is projected to be one of the largest copper mines in the world, capable of producing over 40 billion pounds of copper throughout its operational life and potentially covering more than a quarter of total U.S. copper demand. After a prolonged legal dispute involving the religious rights of the San Carlos Apache people, Rio Tinto recently secured control of the land needed for development and has since launched a $500 million drilling campaign to assess previously inaccessible portions of the deposit.

While Rio has historically committed to keeping Resolution's copper within the United States, Jackson acknowledged that domestic smelting has become financially unviable. Treatment and refining charges, the fees smelters earn for processing copper concentrate, have turned negative due to a global concentrate shortage, leaving U.S. smelters operating at a loss. Jackson indicated that current U.S. tariff structures fail to address this imbalance and called on Washington to consider setting a price floor for refining charges, applying tariffs on copper cathode imports, or restricting concentrate exports to protect domestic smelting capacity.

Rio's Kennecott mine in Utah remains temporarily shut following a worker fatality, the company's second such tragedy this year. Operations are expected to resume within a few weeks pending investigation.

Meanwhile, in Mongolia, Rio Tinto continues negotiations with the government over commercial terms at the Oyu Tolgoi copper and gold project, signaling willingness to adjust management fees and loan interest rates while emphasizing the financial risks it continues to shoulder.