Rio Tinto aluminum chief executive Alfredo Barrios said the company expects China’s annual imports of bauxite to reach 145 million tons by 2030, from around the current 45 million a year.
Advertisement
Initially, Rio Tinto plans to extract 22.8 million metric tons of bauxite a year at the Amrun project, which will replace the East Weipa mine.
The expansion project involves construction of a bauxite mine as well as processing and port facilities on Queensland’s Cape York Peninsula.
The new growth project comes at a time when many analysts and investors are declaring that Rio has better growth project options than BHP.
Mining giant Rio Tinto will expand output from one of the world’s premier bauxite deposits following approval of the $1.9 billion Amrun project.
On Thursday, fellow executive Jean-Sé bastien Jacques-Rio Tinto’s copper and coal chief-said bauxite, along with copper and iron ore, was one of the commodities the company is most excited about for the future. Costs are down by over $5 billion and its aluminium division is outperforming the market. However, if you produce good quality bauxite, and Weipa is very good quality, then you remain relatively unaffected and can generate a high margin throughout the cycle. Mr Walsh said Rio was “establishing Cape York bauxite as the product of choice for the Chinese seaborne market…”
The company made a half year net profit of $US806 million, down 82 per cent, but Aluminium profit more than doubled to $US793 million in the six months to June 30.
Prices for bauxite have already jumped in recent years as China’s supply of the material has deteriorated, and exports from Indonesia were halted under an export ban.
“The commission is satisfied that the mine complex’s significant benefits outweigh its potential impacts”, the New South Wales state Planning and Assessment Commission said in a statement.
Advertisement
Yesterday Rio revealed that it is lining up project financing for the $4 billion underground expansion at Oyu Tolgoi, and will likely make a final investment decision early next year. The investment is the largest that Rio has approved for more than two years, a period when global miners have slammed the brakes on spending following a surge in capital expenditure when they tried to take advantage of rising commodity prices.
