Glencore share plunge casts doubt over future of Aurukun bauxite mine

The shock collapse of Glencore's share price this week has cast doubt over the future of a bauxite mining project in remote Far North Queensland.

Shares in the Swiss-based commodities giant plunged 30 per cent on Monday, September 28 after an investment bank warned its stock could become "worthless" if commodity prices fail to recover. As the company pledged to dramatically reduce its $US30 billion debt, resources analysts said Glencore would be reassessing all projects that require more spending to get off the ground. That leaves a question mark over its ambitions to develop a rich bauxite deposit on land belonging to the Wik and Wik Waya people in Aurukun on the western Cape York Peninsula.

"At the moment [Glencore] probably has bigger problems inside its balance sheet and that may in fact see that project put on the backburner or, for the time being, cancelled," said a resource analyst.

"When you have a look at the action Glencore has taken, it is planning to actually reduce its capital expenditure so that means it will look at all its projects and see what projects don't meet its criteria. We think Aurukun might actually fall into the cancelled projects list at the moment," he said.

That prediction will be welcome news to the directors of Ngan Aak-Kunch (NAK), the group representing native title holders in west Cape York. NAK has been campaigning against Glencore's bauxite proposal, which would see more than six million tonnes of the resource dug up each year over the mine's expected 20-year life span.

"We don't want them sort of mining companies coming into our town and polluting our land and destroying our air and taking away our livelihoods," NAK director Lavinia Ahlers said.

The chief concern held by native title holders is not Glencore's financial performance but rather its track record on environmental management. Earlier this month, the directors of NAK travelled to Borroloola in the Northern Territory to meet with Indigenous leaders who claim the nearby McArthur River zinc mine has polluted local waterways.

"We had some letters and emails come through from the Borroloola people inviting us to talk to them about their experiences," Wik and Wik Waya woman Gina Castelain said.