Cape Alumina to resume Pisolite Hills bauxite project

The Queensland government has declared the Pisolite Hills bauxite mine, which Cape Alumina is developing, a “significant project”, prompting the ASX-listed miner to resume work on the project.

The development of the Pisolite Hills project was put on hold in October 2010 after the previous state government imposed a 500-m buffer zone around waterways in the vicinity of the project area as part of the declaration of the Wenlock river basin as a wild river area.

This reduced the bauxite resource available to the project.

Cape Alumina said on Wednesday that following the state government’s declaration that the project was now considered “significant”, the company would restart work on technical and environmental studies, and would also reopen negotiations with the traditional landowners and local Aboriginal people with a view to finalising an indigenous land use agreement.

MD Graeme Sherlock said in a statement that the Campbell Newman government’s commitment to due process and a new regulatory regime for Cape York, which would achieve a balance between economic development and environmental protection, had given the company the confidence to revisit the project.

“We submitted a new initial advice statement for the Pisolite Hills project to the Coordinator-General recently, and are delighted that he has recognised the strategic importance of the project to the region and to the state of Queensland,” said Sherlock.

“The Newman government has made it clear that the future of Pisolite Hills will now be determined through a genuine and rigorous environmental assessment process, rather than through a political process.”

Sherlock noted that previous studies on the Pisolite Hills project suggested that it could boost economic activity by some A$1.2-billion in net present value terms, and create or sustain more than 1 700 jobs over the mine’s 15- year life.

“It will also boost economic development in regional centres such as Cairns, which will be an important base for the fly-in fly-out component of the workforce,” he added.

Meanwhile, Sherlock noted that Cape Alumina would be able to fast-track the development of the project and submit the environmental-impact study (EIS) for commonwealth and state government consideration by the end of 2013, as a significant amount of work had already been completed on the project.

“Following approval of the EIS and the receipt of other necessary government approvals, we expect to be in a position to start construction of the project. Subject to the arrangement of finance, this is presently anticipated for early 2014, with first export sales of bauxite expected later that year.”

The project has a mineral resource estimate of some 134.6-million tons of bauxite, with the potential to yield seven-million tons a year of product, over a 15-year life-of-mine.