Rio Tinto will expand output from one of the world’s premier bauxite deposits following approval of the $1.9 billion Amrun project.
Amrun involves the construction of a bauxite mine and associated processing and port facilities on the Cape York Peninsula in north Queensland.
The planned initial output is 22.8 million tonnes a year1, replacing production from the depleting East Weipa mine and increasing annual bauxite exports from Cape York by around 10 million tonnes.
Production and shipping are expected to commence in the first half of 2019, ramping up to full production by the end of the year. The project’s design provides options for future expansion to 50 million tonnes a year. The majority of capital expenditure for the Amrun project is scheduled for 2017 and 2018.
Rio Tinto chief executive Sam Walsh said “Amrun is one of the highest quality bauxite projects in the world. It is a tier one asset that will deliver significant benefits to all our stakeholders.
“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.”
1This production target is underpinned as to 80% by proved ore reserves, and as to 20 per cent by probable ore reserves covering the first ten years of production, which have been scheduled from current pit designs by Competent Persons in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, 2012 Edition.