Rio Tinto Approves US$1.9 Bn Australian Bauxite Project -- Update

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO.LN) approved a US$1.9 billion bauxite project in northeastern Australia, bucking a trend among major resources companies that have largely iced new mines to protect profits from low commodity prices.

Rio Tinto said the Amrun mine, formerly known as South of Embley, on the Cape York Peninsula of Queensland state would open in 2019 and initially churn out 22.8 million metric tons of bauxite a year. Bauxite is a raw material that is used to make alumina, a key ingredient in the manufacturing of aluminum.

Production from the mine could be expanded to 50 million tons a year, Rio Tinto said. Much of the early output from Amrun will offset declining production from another mine on the Cape York peninsula--East Weipa--where ore reserves are running out.

Mining companies including Rio Tinto have been selling assets, slowing spending and cutting production of some commodities to shield profits from weak commodity prices. The downturn in global commodity markets largely reflects slowing demand from China, which is the world's biggest buyer of everything from iron ore to coal.

Last month, Rio Tinto said it had pared back output of niche commodities such as diamonds and salt. It also recently sold a stake in the Bengalla coal mine in eastern Australia, after prices of the commodity tumbled to multiyear lows.

Write to Rhiannon Hoyle at [e-mail]

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(END) Dow Jones Newswires

November 26, 2015 23:40 ET (04:40 GMT)

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