Rio Tinto to decide on $1.45bn Weipa mine by 2015 end

A decision on the $1.45 billion South of Embley bauxite project at Weipa is to be made by the end of the year 2015, confirmed officials at Rio Tinto.

Despite Rio Tinto reporting a first half year net profit slumping 43 per cent to $3.98 billion as falling iron ore, coal, copper and aluminium prices took their toll, it still plans about $8 billion in capital expenditure next year and a return to $9.5 billion in 2017. Growth projects being factored in to this number include the South of Embley bauxite project and its 1200 jobs.

The half yearly report said feasibility studies were “progressing as planned” for South of Embley, described as a 22.8 million tonne a year “tier one investment opportunity on Cape York” with mining costs expected to be in its first quarter of development. As per report, required regulatory permits are in place and the project is expected to be presented to the board for final approval by the end of 2015.

The report said bauxite underlying earnings increased by 40 per cent to $370 million in the first half. “Bauxite production was five per cent higher than the first half of 2014 and set a new first half record, primarily driven by a strong performance at Weipa and Gove’s continued ramp-up towards an eight million tonne annual run-rate by the fourth quarter of 2015,” the report said.

Chamber of Commerce and Industry Queensland (CCIQ) president Brett Moller said South of Embley would boost confidence in what was a challenging time for the Queensland resources sector.

“There has been a substantial decline in investment in new resource projects in Queensland with the sector adjusting to lower commodity prices and uncertainty about future demand from Asia,” Mr Moller said. “Rio’s focus on this project suggests there are promising signs for new investment."

Advance Cairns chief executive Mark Matthews said despite difficult trading in the overall resource market, bauxite and aluminium results had been strong. “Rio Tinto’s decision to put the South of Embley project back to the board later this year affirms the opportunity for the region for additional supply and service in the mine development,” he said.