Rio Tinto pumps $1.9bn into Queensland bauxite project

PERTH (miningweekly.com) – Mining giant Rio Tinto on Friday announced a $1.9-billion investment into its Amrun bauxite project, in Queensland’s Cape York.

The miner reported that the project would involve the construction of a bauxite mine and associated processing and port facilities on the Cape York peninsula in north Queensland.

The mine, which was previously known as South of Embley, was initially planned to produce about 22.8-million tonnes a year, replacing production from the depleting East Weipa mine and increasing bauxite exports from Cape York by about 10-million tonnes a year.

The project’s design provided options for future expansion to 50-million tonnes a year.

Production and shipping were expected to start in the first half of 2019, ramping up to full production by the end of the year.

CEO Sam Walsh said that the Amrun project was one of the highest quality bauxite projects in the world.

“In addition to generating attractive returns, with mining costs in the first quartile of the industry cost curve, it will provide jobs and strengthen the economy for the people of Cape York and Queensland for many decades.

“This long-life, low-cost, expandable asset offers a wide variety of development options and pathways over the coming decades. We are establishing Cape York bauxite as the product of choice for the Chinese seaborne market with consistent quality, security of supply and strong technical marketing support. Amrun will be significant in helping to meet growing bauxite demand from China,” Walsh said.

The Amrun project is about 40 km south of Rio’s existing East Weipa and Andoom mines on the Cape York peninsula.

At its peak, construction of the project is expected to provide work for about 1 100 people. Once operational, Amrun would help to support ongoing employment for the existing workforce of about 1 400 employees and contractors at Rio Tinto’s Cape York bauxite operations.

The majority of capital expenditure for the Amrun project was scheduled for 2017 and 2018.

The Queensland Resources Council has been quick to welcome the investment, saying the project was a massive boost for the resources sector and could inject about A$1.5-billion into the Queensland economy.