Rio Tinto has shown confidence in the outlook of the aluminium industry in giving the green light to the $2.1 billion expansion of the Yarwun alumina refinery at Gladstone in central Queensland.
That takes the value its new projects approved around the world to more than $3.5 billion in the past twoyears.
This includes its big iron ore expansion in WA.
The news, plus higher metal prices, boosted Rio Tinto shares back over the $100 mark where they closed at $100.70.
Rio said the expansion would more than double annual production, increasing output by two million to 3.4 million tonnes by 2011.
Rio Tinto chief executive, Tom Albanese, said in a statement that the expansion is one of the most significant investments made by the company in recent years.
"The attractive fundamentals of the aluminium industry, combined with Yarwun's well located, low cost position and our excellent bauxite resource at Weipa, reinforce the deep underlying strength of the group's organic growth pipeline," Mr Albanese said.
Work is expected to start in the third quarter of this year.
Rio Tinto's aluminium chief executive, Oscar Groeneveld, said the expansion would create future supply for the growth in the world traded alumina market.
"The expansion further strengthens our aluminium infrastructure in Gladstone and Queensland," Mr Groeneveld said.
The expansion will include the construction of a gas-fired cogeneration facility, which will become the refinery's primary fuel source.
Rio Tinto has reached agreement with Origin Energy coal seam gas to power the refinery.
Gas supplies will commence between March and July 2010, ramping up to 22.8 PJ a year for 20 years when fully operational.
Origin plans to spend an estimated $260 million to further develop its Walloon coal seam gas fields to supply the energy.
In addition, energy utility Alinta will spend $112 million expanding its Queensland Gas Pipeline to provide additional capacity to meet the gas needs of the Yarwun expansion.
…………….
Meanwhile Crane Group has shown there can be earnings growth in the sluggish building industry by upgrading its full year earnings outlook.
The upgrade came as Crane revealed the $100 million acquisition of a Western Australian plastic pipe and fittings maker, KBE.
Crane says it now expects net profit before significant items to grow by 14 per cent to around $53.7 million in the 2007 financial year, compared to 2006.
That's an upgrade from the company's previous forecast for a 10 per cent lift earnings for the year.
Crane said it would buy Kingston Bridge Engineering Pty Ltd (KBE), and its sister company, Polymer Fusion Education Pty Ltd, for about $100 million.
The acquisition of the Western Australia-based group will add to Crane's largest division, Iplex Pipelines business.
It will also give the Sydney-based Crane more plant, equipment and warehouse capabilities to increase its market share in pipeline goods and give Crane a broader range of goods to compete in the civil and infrastructure projects in Western Australia and Queensland.
KBE has forecast revenue for the 2007 fiscal year of around $65 million and earnings before interest and tax at $13.3 million.
The purchase will be partly funded by raising $60 million through a share placement to institutional investors.
Crane shares went into a trading halt yesterday after trading at $16.20.
