JOHANNESBURG - Rio Tinto Group halted mining operations at its Richards Bay Minerals unit in South Africa amid escalating violence in surrounding communities that led to an employee being shot and injured.
Smelters at the site in the KwaZulu-Natal province are operating at a reduced level and a $463 million expansion project has been temporarily paused, London-based Rio said Wednesday in a statement. There’s been an escalation of criminal activity directed at the operation’s staff, Rio said.
Output for 2019 is now expected to be at the low end of a guidance range of 1.2 million to 1.4 million tons and Rio is contacting customers to minimize disruptions. It isn’t clear when operations will resume and the company is appealing to the government to step in and end the violence, Werner Duvenhage, the managing director for RBM, said by phone.
“The losses are quite clearly going to be a significant amount of money,” Duvenhage said. “We continue to work to see how the situation can be resolved, but we don’t have a timeline on when operations can resume.”
The decision to halt operations was preceded by weeks of protests around the area where the mine is located, causing “on-and-off disruptions,” Duvenhage said, adding that the demonstrations are not related to the company. South African protests against everything from poor municipal services to strikes are often marred by violence, assaults against non-striking workers, the blocking of roads or burning of tires.
‘Serious Harm’
RBM, on South Africa’s east coast, employs about 5,000 staff and contractors, and exports titanium dioxide slag, used to create ingredients for products including paint, plastics, sunscreen and toothpaste. An expansion project announced in April is seeking to maintain output of high-margin products at the site amid a strong market outlook, according to Rio.
“We have taken decisive action to stop operations to reduce the risk of serious harm to our team members,” Bold Baatar, chief executive officer for the energy and minerals unit, said in an earlier statement. “Our goal is to return RBM to normal operations in a safe and sustainable way.”
BLOOMBERG
