Rio Tinto Group, the world’s second-largest mining company, will decide within the next year on whether to expand its Weipa bauxite mining operation in Australia to help capture rising demand from China.
Bauxite is “the healthiest” of the three products sold by Rio Tinto Alcan, Jacynthe Cote, chief executive officer of the company’s aluminum unit, told reporters today after a speech at the World Mining Congress in Montreal. In addition to mining bauxite, Rio Tinto Alcan refines alumina and produces aluminum.
Australia’s federal government conditionally approved in May plans to expand mining and extend the life of the 50-year-old project. The Queensland facility last year produced 23.7 million metric tons of metal-grade bauxite, a source of aluminum, according to the company’s website. Rio began studies on the development in 2008, a year after the company acquired bauxite, aluminum and alumina assets as part of its $38 billion takeover of Canada’s Alcan Inc.
“China imports a great deal of bauxite and output is constrained,” Cote said. “When we think about the next project we could seriously take a look at, it’s definitely the expansion of our Weipa bauxite mine.”
Rio Tinto Alcan had sales of $5.29 billion in the first six months of 2013, equivalent to about 20 percent of the company’s revenue. Rio Tinto expects to produce 34 million metric tons of bauxite, 7.3 million metric tons of alumina and 2.5 million metric tons of aluminum in 2013, it said last week.
The price of bauxite imported to China gained about 15 percent this year through the end of June to about $53 a metric ton, Lloyd O’Carroll, an analyst at Davenport & Co. in Richmond, Virginia, said in an Aug. 7 report.
BHP Billiton Ltd. is the largest mining company.