Rio considers working with Chinalco on bauxite

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Apr 2008

Rio Tinto Ltd/Plc could look to expand bauxite production in Australia in partnership with its biggest shareholder, Chinese aluminium giant Chinalco, the head of Rio Tinto Alcan said on Wednesday. Chinalco acquired 9.3 percent of Rio's stock in a $14 billion raid on the company's London stock in February with the help of Alcoa Inc. Rio Tinto Alcan Chief Executive Dick Evans highlighted the relatively low cost base, expansion prospects and strong price outlook for aluminium in a media briefing, the latest prong in Rio Tinto's defence against a takeover bid by BHP Billiton Ltd/Plc.
Evans said any decisions by Rio Tinto to tap reserves south of its Weipa mines in Queensland, Australia, might hinge on what Chinalco does with its landlocked Aurukun deposit nearby as they would be competing to use the same port.
"We have said publicly we are not opposed to working with our single largest shareholder, if something could make sense. So that is something ... that we would consider as an option as we explore the best to further develop Weipa," he told reporters.
Australia's Queensland state last year picked Chinalco subisidiary Chalco, from a field of 10 to develop the reserves, which have lain dormant for decades.
It is the first step in a wider aluminium-making project proposed by Chalco costing around $3 billion. Geologists estimate the Aurukun bauxite reserve ranges in size from 500 million to 650 million tonnes.
Chalco had been tipped as the main contender to develop the project only after Rio and Alcoa pulled out.

Source: Reuters