Rio Tinto Approves US$1.9 Bn Australian Bauxite Project -- Update
27 November 2015 - 03:55PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO.LN) approved a US$1.9 billion bauxite
project in northeastern Australia, bucking a trend among major
resources companies that have largely iced new mines to protect
profits from low commodity prices.
Rio Tinto said the Amrun mine, formerly known as South of
Embley, on the Cape York Peninsula of Queensland state would open
in 2019 and initially churn out 22.8 million metric tons of bauxite
a year. Bauxite is a raw material that is used to make alumina, a
key ingredient in the manufacturing of aluminum.
Production from the mine could be expanded to 50 million tons a
year, Rio Tinto said. Much of the early output from Amrun will
offset declining production from another mine on the Cape York
peninsula--East Weipa--where ore reserves are running out.
Mining companies including Rio Tinto have been selling assets,
slowing spending and cutting production of some commodities to
shield profits from weak commodity prices. The downturn in global
commodity markets largely reflects slowing demand from China, which
is the world's biggest buyer of everything from iron ore to
coal.
Last month, Rio Tinto said it had pared back output of niche
commodities such as diamonds and salt. It also recently sold a
stake in the Bengalla coal mine in eastern Australia, after prices
of the commodity tumbled to multiyear lows.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 26, 2015 23:40 ET (04:40 GMT)
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