Kennecott Eagle Minerals Signs Civil Construction Contract 

ISHPEMING, MI Rio Tinto and Kennecott Eagle Minerals Company (KEMC) reported the signing of a contract with Bacco Construction Company (Bacco) of Iron Mountain, Michigan for the performance of civil construction work at the Eagle Mine Site.

In June, KEMC announced that its parent company, Rio Tinto, would invest $469 million in the construction of the Eagle nickel and copper project located northwest of the City of Marquette, Michigan (USA) in Michigan's Upper Peninsula. Funding will enable construction of the new underground mine, associated surface facilities for servicing the mine, rehabilitation of the existing Humboldt Mill, and the development of a multi-use access road. Eagle will be the only primary nickel mine in the U.S., and is the first new mining operation to be permitted and built in Michigan in decades. Jon Cherry, General Manager of Kennecott Eagle Minerals, said, "Nickel and copper from the Eagle deposit will add an important source of these raw materials as long-term demand for them is expected to grow. At the same time, construction of the project in the near term, and its operations in the years ahead, stand to create hundreds of much needed and well paying jobs for Michigan workers." Eagle will produce separate nickel and copper concentrates containing an average of 17,300 and 13,200 tonnes per year of nickel and copper metal respectively over six years. Ores will be transported to Humboldt Mill in Champion, Michigan for milling and processing to produce concentrates that will be shipped to final refining facilities. The main focus of work in 2010 will be construction of an advanced water treatment plant and related environmental control systems, as well as detailed engineering. Construction is slated to run through 2013 with production commencing in late 2013. Combined, the mine and mill projects will create an estimated 700 new jobs, with more than 400 of them coming in the near-term three year construction phase and more than 200 during operations. Building the mine, with its best practice engineering and important environmental protection systems, will require the expertise found in Michigan's respected skilled workforce. The State of Michigan approved a suite of environmental permits for both the mine and mill projects beginning in 2007. All original legal challenges brought by mine opponents have been resolved in favor of the State and Kennecott. Eagle is 100 percent owned by Rio Tinto and operated by Kennecott Eagle Minerals Company located in Ishpeming, Michigan. The company currently employs approximately 30 full time employees engaged in project development and exploration in the U.P. region. Kennecott has committed minimum 75 percent local hires for its projects. Local contractors and large equipment suppliers are being used for key aspects of pre-construction and construction activities. For more information contact: 906-486-1257.