Mining giant Rio Tinto has approved the development of a $1.9bn Amrun bauxite project in Australia, in order to meet growing demand from China.
Located about 40km south of Rio Tinto’s existing East Weipa and Andoom mines on the Cape York Peninsula in far north Queensland, the Amrun project is expected to have an initial production capacity of 22.8 million tons per year.
The company said that the output can be increased to 50 million tons a year in future.
Amrun project involves an open-cut mine, processing plant and bauxite stockpiles, a power station, warehouses, well as new barge, ferry, and ship loading facilities.
Rio Tinto CEO Sam Walsh said: "In addition to generating attractive returns, with mining costs in the first quartile of the industry cost curve, Amrun will provide jobs and strengthen the economy for the people of Cape York and Queensland for many decades."
Rio Tinto said that the production from the Amrun project, which was formerly known as South of Embley, would increase annual bauxite exports by about 10 million ton from Cape York and would replace with the output of the diminishing East Weipa mine.
The project will commence production and shipping in the first half of 2019 and is planned to reach full production capacity by the end of the year.
Walsh added: "This long-life, low-cost, expandable asset offers a wide variety of development options and pathways over the coming decades.
"We are establishing Cape York bauxite as the product of choice for the Chinese seaborne market with consistent quality, security of supply and strong technical marketing support."
The project has secured conditional approval from the Australian Government in 2013. The project is expected to create around 1100 jobs at its peak construction phase.
Image: The Amrun project is expected to have an initial output of 22.8 million tons annually. Photo: Copyright © 2014 Rio Tinto.