Glencore, Chinese Group Bid to Develop Australian Bauxite Mine
Glencore Xstrata Plc (GLEN) and China’s Australian Indigenous Resources Pty submitted proposals to Australia’s Queensland government to develop the Aurukun bauxite project in the northeast state.
Queensland in April shortlisted a number of companies, including Rio Tinto Group, to develop the Aurukun resource after dropping a previous requirement to include a refinery. Aluminum Corp. of China Ltd., known as Chalco, in 2010 ended an accord with the state government to develop the mine in the Cape York Peninsula after aluminum prices fell. The project cost was estimated at A$3 billion ($2.8 billion) at the time.
“The Queensland government will now assess each proposal keeping in mind the project must be delivered at no cost or risk to the state and must meet strict environmental conditions,” Acting Premier Jeff Seeney said today in a statement. “The government will now work towards a final decision on a preferred proponent by the end of the year.”
Rio Tinto (RIO) and Chalco have withdrawn from the bidding process, the government said in the statement. Cape Alumina Consortium, another shortlisted bidder, didn’t submit a proposal by a Sept. 13 deadline, it said.
Mining companies are seeking to cut expenses as commodity prices decline, focusing on the lowest-cost projects. Refining bauxite from Aurukun at an existing refinery in Australia or overseas would make the project more competitive.
Australian Indigenous Resources is a Chinese consortium made up of Hong Kong-listed APAC Resources Ltd. (1104) and Aust-Pac Capital Pty. Cape Alumina Consortium included Australia-listed Cape Alumina Ltd. (AWC), commodity trader Noble Group Ltd. and Qube Bulk Pty.