mining industry. We move roughly 150 million tonnes of earth every single

year to make sure that we always have access to our ore body.

Copper mines like this one in Utah are on the front line of America's

transition to clean energy.

This site, owned and operated by mining giant Rio Tinto,

produces roughly 200,000 metric tons of copper

annually. Global demand for copper, a major component of EVs,

is expected to almost double from 25 million metric tons to nearly

49 million metric tons by 2035.

But miners face a multitude of issues as they ramp up production, not

least of which includes mitigating environmental damage.

Addressing the concerns of the local stakeholders and operating in remote

regions of the world.

We're definitely part of the energy transition solution.

The challenge is, of course, we have to provide the materials

to meet this increasing demand.

Mining is also difficult and potentially dangerous.

Work here at Rio Tinto's Kennecott mining operation on the outskirts of

Salt Lake City.

Three quarters of a mile beneath the surface, miners work around the clock

digging for copper.

That material is then loaded onto 350 ton trucks and hauled

to the surface.

You know, when you first get on up here, you get in this thing and it feels like,

oh my gosh, I'm driving a house around.

But after a couple of weeks, you kind of get used to it because everything up

here is so big.

Adjacent to the mine, a smelter and refinery help process the extracted

material into 99.9% pure copper.

Just to why there's going to be a real problem with this transition over the

next ten years is that it is very, very hard for these companies to even

maintain the level of production that they have at the moment.

Based in the UK, Rio Tinto is one of the world's largest mining

companies with projects in 35 countries.

In addition to its 17 iron ore mines in Western Australia

that produce material used in steel, its products include

aluminum, diamonds and boron, a component in

fertilizer and smartphones.

Historically, miners have been known for their environmental impact, but

today are increasingly recognized as crucial players in the transition to

green energy.

So what is Rio Tinto doing to ramp up production of its critical minerals

business, and how will China's economic slowdown impact its iron ore

sector? CNBC got a behind the scenes look at Rio

Tinto's Utah operation to find out.

Extracting minerals from beneath the surface is challenging work.

All right, so.

We're drilling a hole about 50ft down into the ground.

We load that with ammonium nitrate and fuel oil, and then we have to fracture

that rock. So that's kind of step one.

The Kennecott operation in Utah opened in 1903 and was

purchased by Rio Tinto in 1989.

Large enough to be seen from space.

It is the second largest copper mine in the US.

At the bottom of the pit, shovels extract ore containing just

0.5% copper.

Small amounts of gold and silver are also captured.

So as the haul truck driver, our shift starts at 6:00 in the morning.

Our team leaders will let us know what's going on in the pit, if there's

any shovel moves, any incidents, if there's anything

dangerous we need to be aware of.

Using a four mile conveyor system, softball sized rocks are

taken to the concentrator where they are broken up into dust.

A chemical process called flotation grabs the metal, creating a copper

concentrate of roughly 25%.

A 12 mile pipeline then transfers the material to a smelter.

Now this is really where the actual metals processing begins.

You can think of a copper smelter as basically a series of furnaces.

We're making a 700 pound anode, which is 99% pure copper.

That copper plate is then transported by train to a refinery, where it sits

for almost two weeks in a bath of low, concentrated sulfuric

acid mixed with electricity.

The final product is 99.9% pure

copper.

Nearly 100% of everything that that Kennecott makes stays within North

America with, with roughly 90 to 95% of that staying right here in the United

States.

And that consumption is predicted to soar.

Renewable power systems like wind and solar are at least five times

more copper intensive than conventional power.

To meet that demand, Rio Tinto expanded its footprint at

Kennecott, invested more than $2 billion to modernize the mine and its

adjacent facilities, and is trying to open an underground copper mine 60

miles east of Phenix.

I think Kennecott has a long future ahead of it, and we're hoping to

increase its copper production anywhere between 30 to 40% over

the next five years or so.

Having said that, Arizona is the Copper State.

It's where 70% of US copper is produced, and we would

like to actually be a significant contributor and potentially build one of

the top ten copper mines in the world.

The US has the sixth largest copper reserves globally, about

44 million metric tons, behind Chile and four other nations.

About half of America's copper supply is imported, and that could jump to

two thirds by 2035.

The rolls down and no one's driving.

No, we're not making money.

Got to keep the wheels turning.

Rio Tinto got its start 150 years ago.

In 1873, after the Spanish government sold a group of mines in the

south of that country to a consortium of banks for roughly $4

million. A decade later, the London based operator was supplying about

10% of the world's copper.

By 1958, it had expanded operations to copper mines in what is now

Zambia, and was looking for uranium in Canada and Australia.

But it was iron ore that propelled the company's growth.

Rio made its first shipment of iron ore from its operations in Western Australia

to Japan in 1966.

A handful of years later, it moved into China.

By 2016, the company had exported over 5 billion metric

tonnes of iron ore from Western Australia.

About 98% of the world's iron ore is used to make

steel.

We have had really good relationships with our Chinese partners

throughout. We sell more than half of our products into

China.

In 1985, Rio Tinto acquired a 30% stake in

the Escondida copper mine in Chile, the world's largest copper producing

mine. Its stock price soared in 2007 on speculation

of a takeover by rival BHP, but later fell partly due to the state of the

global economy.

It bought Canadian aluminum maker Alcan for $38 billion

that same year.

Rio Tinto's mineral business brought in $58 billion in revenue in

2022. Its iron ore segment made up 53% of those

sales, followed by aluminum minerals, which include diamond mining

and copper.

The market cap of the top 40 mining companies, including BHP,

Glencore and Southern Copper was more than $1.2 trillion in

2022, up from about $400 billion in 2003.

While running a mine is technically challenging, starting a new one might be

even harder.

It takes 10 to 15 years to build these mines.

But I think the most important challenge is not the technical one about

can we build the mines or can we build the manufacturing sites?

It's actually how do we work with governments to accelerate the permitting

and the approval processes to match these.

Attempts to launch Rio Tinto?

Arizona's Resolution Copper project have been ongoing for more than two

decades. Along with minority partner BHP, Rio Tinto has so

far spent $2 billion.

Native American groups and environmentalists have opposed the

project, which could become one of the largest underground mines globally.

There's a very serious constraint on mining

companies to get permits in the US.

It's one of the hardest jurisdictions in the world.

Rio has seen challenges in other parts of the world to.

The company began mining copper in Oyu Tolgoi, Mongolia in

2011, but faced ongoing disputes with the government there as plans

to open an underground mine fell behind schedule and over budget.

Production began in 2023, and the mine could one day produce the

copper equivalent to what's needed for 16,400 electric battery

vehicles daily.

Building a mine in the Gobi Desert in the middle of literally nowhere.

You know you're by the Chinese border.

You're, you know, 600km from the capital in Mongolia.

It is. It is a really difficult place to build a mine.

In 2020, Rio Tinto CEO Jean-sebastien Jacques

resigned following the destruction of a 46,000 year old

Aboriginal cave in Australia.

Australia's mines provided 85% of Rio's profits at the

time.

It's been three years.

We continue to learn, we continue to adapt our mining practices.

We have a lot of work and ground to cover still, but the

entire Rio Tinto family is absolutely focused on this endeavor.

We're a $100 billion market cap company.

We are one of the largest mining companies in the world.

We take our reputation very seriously.

We don't take shortcuts and we follow due regulatory process.

Another challenge the mining industry and Rio Tinto face is a lack of

workers. More than half of the current mining workforce in the

US, or about 220,000 people, will retire and need to

be replaced by 2029.

And so the industry really has got a missing generation in effect in terms of

the skilled people to be able to build projects, move forward.

A lot of people from the last cycle are now in their late 50s in their early

60s.

To increase productivity, the company has turned to automation.

Because it isn't the old school mining that people have always thought.

We're not sitting here with a pickax and mine carts.

We're using high tech technology from.

Its offices in Perth, roughly a thousand miles away.

Operators monitor autonomous drilling rigs and autonomous haul trucks

deployed at the company's network of 17 iron ore mines in

Australia's western Pilbara region.

I think we've got about 370 autonomous haul trucks in our

fleet out of a total number of just above 400, so it's a very high

percentage now that that are autonomous.

And we will progressively continue to to increase that number.

In 2018, each truck operated on average 700

hours more than conventional haul trucks with 15% lower

costs. The company also launched an autonomous train in 2019.

Like its haul trucks, the trains are monitored from its operation

headquarters in Perth and run on a 1200 mile rail

network.

The challenge is, is that you need to have a significantly long mine life to

be able to meet the capital allocation decisions, you need to have a relatively

homogeneous ore body.

And despite those technological advances, boots on the ground as well as

access to new mines will likely remain key as mining companies like Rio

Tinto ramp up production for the coming EV boom.

Theoretically, there are enough reserves in the US that we could become

independent for a copper need.

We could. It's just how do we do that?

How do we get the permits?

How do we get the acceptance of the public?

How do we work through those challenges?