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Chalco drops $2.4bn Australian bauxite plan

July 2, 2010

“Chalco, the second-largest aluminium producer, has pulled out of a A$3bn (US$2.4bn) deal to develop a bauxite refinery in Australia, blaming a drop in aluminium prices and difficult global conditions.

The Hong Kong-listed subsidiary of Aluminium Corporation of China won a permit to mine the high-quality Aurukun bauxite deposits in northern Queensland on condition it build a processing plant.”

Source: Financial Times, July 2 2010


  • When Chalco, a Chinalco daughter, won the permit for the bauxite deposit aluminium prices were $3,000 a tonne compared with below $2,000 today.
  • Condition for the development was the construction of a smelter in Australia, to prevent the ore from being shipped directly to China. In this case the benefit for the Australian citizens would be significantly lower than with domestic smelting.


  • The Australian government is likely to reopen the permitting process for the deposit, giving other firms a renewed option to develop the deposit. However, only few firms currently have the funds to undertake the project.
  • Today’s announcement by the new Australian prime minister that the super profit tax will only cover coal and iron ore operations does increase the feasibility of the project.

©2010 – thebusinessofmining.com

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