Stmt.re Kennecott Utah Copper

Rio Tinto PLC
29 May 2001


The following was released on Friday 25 May 2001 by Rio Tinto's wholly owned
subsidiary Kennecott Utah Copper Corporation.
 

                       Kennecott To Curtail Operations                        


MAGNA, Utah---May 25, 2001---Kennecott Utah Copper Corporation (KUC) will
start to suspend operations at its North Concentrator Plant on or about June
1. Associated rail haulage operations will also be curtailed. The curtailment
will impact about 235 hourly and salaried employees, and will reduce KUC's
annual ore production by about 18 percent. Worker Adjustment and Retraining
Notification Act notices were issued on May 25 announcing the curtailment.
 
According to Bruce Farmer, Kennecott's president and CEO, 'The action is in
response to difficult market conditions and the need to improve the Company's
business performance. Our costs are too high and the closure of the higher
cost, older North Concentrator Plant, will help reduce our costs over all.
This action will be only a part of an ongoing drive to reduce costs and
improve efficiencies.' In the last three years, continuing low copper prices
and increased costs of production have resulted in United States copper
production being reduced by more than 33 percent.
 
'Kennecott regrets the impact that this necessary action will have on
employees. To minimize this impact, the Company is discussing an enhanced
early retirement for eligible hourly and salaried employees. Meetings have
been held with union officials to discuss the proposal for hourly represented
employees. An early retirement program also will be offered to eligible
salaried employees. We are hopeful that the loss of jobs can be minimized
through attrition,' said company spokesman Louie Cononelos. He added that the
Company believes that the proposed enhanced retirement plans and the
reassignment of personnel should reduce the number of involuntary
terminations.
 
The North Concentrator is Kennecott's oldest plant. Its Bonneville Crushing
and Grinding facility was built in 1966, and its Magna Flotation facility was
upgraded in 1982. Following completion of Kennecott's Bingham Canyon Mine and
Copperton Concentrator modernization in 1988, the North Concentrator was to
be closed, but its operations were continued because of high copper prices.
In 2000, KUC sold approximately 30,000 tons of copper in concentrate produced
from the North Concentrator to independent smelting and refinery facilities
because it was unable to process it on site. According to Farmer, KUC's
smelting and refining production will be maximized as the Company reduces
operating costs and improves efficiencies.
 
 
For further information, please contact:
 

                                                                  
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