Rio Tinto Approves $1.9B Amrun Bauxite Project

Ship being loaded at Rio Tinto Weipa operations with bauxite stockpiles in the
background. A new port will be built near Boyd Bay to handle production from
the Amrun project. (Photo: Rio Tinto)
Rio Tinto has approved development of its $1.9 billion Amrun bauxite project on the west coast of the Cape York peninsula in north Queensland, Australia, about 40 km south of the company’s existing East Weipa and Andoom mines. Development will include construction of infrastructure required to support the bauxite mine, including a processing plant and port, a dam, a tailings storage facility, roads, and a ferry terminal on the Hey River to transport workers from the nearby town to the mine.

Rio Tinto is targeting an initial bauxite production rate of 22.8 million metric tons per year (mt/y), replacing production from the currently depleting East Weipa mine and increasing Rio Tinto’s annual bauxite exports from the Cape York peninsula by around 10 million mt/y. Project design also provides options for future expansion to 50 million mt/y.

Production and shipping of bauxite from Amrun are scheduled to begin in the first half of 2019, ramping up to full production by the end of the year. The majority of capital expenditure for the project is scheduled for 2017 and 2018. The project offers an internal rate of return in excess of 20%, and more than half of its future production is already committed under off-take agreements.

Production planning for the mine is supported 80% by proved ore reserves and 20% by probable ore reserves, sufficient for the first 10 years of production. Rio Tinto has 1.49 billion mt of bauxite reserves in the Cape York region, plus 1.91 billion mt of resources.

Rio Tinto Chief Executive Sam Walsh said, “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.”

At peak construction, the Amrun project is expected to provide work for around 1,100 people. Once operational, Amrun will help support ongoing employment for Rio Tinto’s existing Cape York bauxite operations workforce of around 1,400 employees and contractors.

As featured in Womp 2016 Vol 01 -