Rio Tinto isn’t too worried about the new federal Labor government, the Greens or the influence of the independents, judging by two moves revealed yesterday to spend over $1.2 billion over the next three to four years on expansion in iron ore and bauxite.
The two moves yesterday came after it approved the investment of around $A700 million in the $US 1.6 billion Hope Downs iron ore mine in WA on August 31.
As part of its big iron ore expansion project, Rio yesterday revealed a contract to build a new port in the Pilbara worth more than $270 million with Leighton subsidiary, John Holland (see separate story).
And it has applied to the federal government for approval for the $1 billion expansion and renewal of its already huge Weipa bauxite mine on Queensland’s Cape York.
The move will effectively revitalise the Weipa mine and extend it for up to another 40 years.
Rio said in a submission yesterday that the initial phase of operations would involve mining of bauxite at a rate of 15 million tonnes a year to replace depleted East Weipa production.
The expansion would take three years and would start once it receives environmental approval.
The new operation would have capacity of 50 million tonnes of bauxite a year when completed.
And bauxite would be exported from the new port.
The company began a $30 million study into the development in 2008.
According to Rio’s half yearly production report in July, output from Weipa is running at around 17 million tonnes of bauxite a year, so the proposed expansion would see a near doubling in capacity.
The expansion would include two new processing plants and a new port, Rio said in a filing today to the federal Department of the Environment, Water, Heritage and the Arts.
Rio Tinto Aluminium (RTA) said it "proposes to extend its existing bauxite mining operations north of the Embley River (western Cape York Peninsula) on Mining Lease (ML) 7024, to areas within ML7024 located south of the Embley River.
"The Project includes bauxite mining and the construction and operation of two new bauxite processing plants and infrastructure associated with the mining operations, including roads, water supply infrastructure, product stockpiles, barge and ferry facilities, and ancillary infrastructure.
"This infrastructure will be located on Strategic Port Land in the Port of Weipa. RTA will construct and operate new port and ship-loading facilities south of Boyd Point, including a jetty, berths and shiploader. Dredged spoil disposal is proposed in offshore waters.
"The bauxite reserves in the Project area could sustain a mine life of about 40 years, depending on annual production rate.
"Mine life will also depend on the extent to which mineable reserves may change in the future subject to on-going exploration and economic factors."
In its documentation Rio Tinto warned that not proceeding with the expansion would end bauxite mining at Weipa and threaten the Gladstone alumina refineries and aluminium smelter.
"The option of not proceeding with the Project is not financially feasible as the bauxite reserves will be depleted in RTA’s current mining areas north of the Embley River, leading to the progressive closure of the Weipa mine.
"Also, without an alternative source of bauxite the Gladstone alumina refineries will lose a viable, ongoing source of bauxite, and the town of Weipa will lose a major financial contributor," Rio said.
Rio shares rose 1.4%, or $1.05, yesterday to $75.30.
