Chalco has delayed a decision on the construction of a $2.2bn alumina refinery in Queensland, Australia due to market uncertainty.

The decision to mine bauxite in Cape York and refine it at Bowen, Queensland was previously scheduled for September or October 2009. However, despite being in the final stages of evaluation for the mine and refinery, Chalco will now not come to a decision before the end of the year.

Chalco said the current poor economic landscape was a major challenge for the mine and refinery, and it will be sometime before there is a recovery in alumina markets to a pre-global financial crisis position.

Chalco was awarded the bauxite deposits in 2004 by the Australian Government on the proviso that a refinery was constructed.

The results of this may mean that if the Australian Government allows mining but not a refinery, failed bidders for the deposit will be up in arms.