Rio to keep operation in South Africa shut

Rio Tinto has announced that operation at at its Richards Bay Minerals (RBM) project in KwaZulu-Natal, South Africa, which was shut down in late June following the murder of the top manager, will remain halted.

This is despite talks with the government. A spokesperson for Rio Tinto affirmed that everyone was keen to see the resumption of operations as soon as possible. “But the safety of our people and the security of our operations must be assured before we can return to work,” he said.

Escalating violence forced the miner to declare a force majeure on customer contracts at RBM and seek help from authorities to control violent community unrest. The shutdown includes all mining and smelting operations at Richards Bay, where three Rio employees have been killed since 2015. The Rio shutdown sent the share price of Perth-based mineral sands producer Iluka Resources soaring. Iluka stock was up more than 10 per cent in early trade to US $9.03.

Local employment problem

In an attack in May, Richards Bay general manager Nico Swart was ambushed and shot dead by three gunmen on his way to work in what local media have described as an assassination. The Zulti South project at Richards Bay has been suspended since 2019 for security reasons and because of community unrest.

Rio had planned to spend almost US $500 million building the Zulti South project as part of a plan to sustain Richards Bay’s capacity and extend mine life. Richards Bay operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility. The operations produce ilmenite, rutile and zircon plus titanium dioxide.

Unions have linked the escalating violence, including the attacks on workers and burning of heavy machinery, to issues around the employment of locals at the mine. They have urged South African President Cyril Ramaphosa and police to step up efforts to end the violence and save jobs.

“Following the tragic death of our colleague Nico Swart, we have faced serious challenges in recent weeks, with business disruptions orchestrated by criminals, which have put our people at risk and resulted in the costly destruction and theft of property,” said Richards Bay managing director Werner Duvenhage.