Rio Tinto to start early works and final studies to increase Amrun mine's bauxite production on Queensland's Cape York Peninsula

Rio Tinto is commencing early works and engineering studies for the Kangwinan project at its Amrun bauxite mine in Queensland, Australia, with a targeted first output in 2029. The expansion aims to increase bauxite production capacity by up to 20 million tonnes annually, supplementing the current 23 million tonnes, and will replace output from the Andoom and Gove mines which are nearing closure; the project is contingent on approvals and is expected to generate 800 construction jobs while maintaining the existing Weipa workforce.

Analysis

Rio Tinto is advancing its Kangwinan project to significantly expand bauxite production at the Amrun mine in Queensland, Australia, signaling a strategic move to secure long-term supply from its world-class deposits as existing mines approach depletion. The project aims to increase annual bauxite capacity from its Weipa Southern operations by up to 20 million tonnes, in addition to the current 23 million tonnes, with first output anticipated by 2029. This expansion is primarily intended to replace diminishing production from the Andoom and Gove mines, which are slated for closure towards the end of the decade, thereby maintaining supply to Rio Tinto's Australian alumina refineries and its export markets, including China. The development, which follows the US$1.9 billion Amrun mine opening in 2018, is projected to create over 800 construction jobs and preserve the existing workforce from mines slated for closure. While early works and engineering studies are underway, a final investment decision is contingent upon completion of various studies, consultations with Traditional Owners (the Wik Waya people), and securing regulatory approvals by 2026, with the project's positive sentiment reflecting its importance for Rio Tinto's fundamental position in the global bauxite market and its integrated aluminium value chain.

Key Decisions for Investors

• Investors should view this project as a long-term strategic initiative by Rio Tinto to sustain its bauxite production levels and secure feedstock for its aluminium business, rather than an immediate driver of new net volume growth for the group.
• Monitor progress towards the final investment decision in 2026, paying close attention to the outcomes of cultural heritage consultations, environmental studies, and regulatory approvals, as these represent key project milestones and potential hurdles.
• Consider the capital expenditure implications, which are not yet detailed, and how this fits into Rio Tinto's overall capital allocation strategy, especially given the long lead time to first production in 2029 and the project's primary role in replacing depleting assets.