Mining giant Rio Tinto (ASX:RIO) is expanding production capacity at its Amrun bauxite mine on the Cape York Peninsula in far north Queensland.
The $44.38 billion company plans to start early works and undertake final engineering studies on a new bauxite mine and port expansion to almost double production from its Weipa Southern operations, where Amrun is located, from 23 million tonnes currently to up to 43 million tonnes.
The project is named Kangwinan at the request of Traditional Owners, the Wik Waya people.
Expanded production is targeted for 2029, and will replace output from the Andoom mine in Cape York and the Gove mine in the Northern Territory, which are both due to close toward the end of the current decade.
If approved, the project will establish a mining centre 15km southeast of Amrun, which was built at a cost of US$1.9 billion ($2.9 billion) and opened in 2018.
The Weipa operations currently comprise three bauxite mines, processing facilities, shiploaders, an export wharf, two ports, power stations, a rail network and ferry terminals.
Kangwinan is expected to create over 800 jobs during construction and will maintain the workforce currently employed at Weipa’s mines that are slated for closure.
The approved early works include building a 250-room camp at Amrun Village to house construction workers and developing an initial access road to the Kangwinan area.
A final investment decision is scheduled for 2026, subject to cultural heritage consultation with Traditional Owners, completing engineering, cultural heritage and environment studies, as well as securing regulatory and other approvals.
Shaw and Partners Head of Research Andrew Hines says in a March 2025 research report that the same dynamic that caused iron ore prices to soar from less than US$50 a tonne in the early 2000s to over US$100 a tonne is now happening in the bauxite market.
“Bauxite pricing has increased because of strong demand from China, coupled with declining Chinese domestic supply, Indonesian export bans, and supply disruptions in Guinea (notably GAC export bans, which are yet to be resolved),” he says.
A dispute between the Guinea Government and Emirates Global Aluminium has restricted exports from subsidiary Guinea Alumina Corporation’s (GAC) bauxite mine and has also reportedly resulted in supply to EGA being restricted from other Guinea mines.
Without bauxite there is no aluminium production. About two and a half to three tonnes of the red ore is required to make one tonne of alumina, and two tonnes of alumina is needed to make one tonne of aluminium.
Meanwhile, China’s supplies are on the decline. Metro Mining (ASX:MMI) CEO Simon Wensley previously told Mining.com.au that in the past 50 or 60 years China had been a big producer of bauxite, but the country’s resources were dwindling and the quality declining.
“At the same time that their aluminium industry has been growing, their bauxite supply has been going the other way,” he said.
This means China needs to secure more supply from elsewhere, and Australia and West Africa are the two biggest suppliers.
Australia currently accounts for 25% of global bauxite exports, with the top importer being China – which takes 98% of the country’s supply.
Write to Angela East at Mining.com.au
Images: Rio Tinto
