Rio Tinto commits $1.9 billion to Queensland bauxite mine as Australia secures long-term aluminium supply
By Shahnoor Saqib — SCN NEWS
MELBOURNE — Rio Tinto announced a US$1.9 billion investment on Friday to develop the Kangwinan bauxite project in Queensland, committing fresh capital to one of Australia's largest mineral-producing regions as the mining group seeks to maintain its supply of raw materials for aluminium production and replace output from ageing operations.
The project, located on the Western Cape York Peninsula, will establish a new bauxite production centre near Rio Tinto's existing Amrun mine and add 20 million tonnes of annual production capacity to its Weipa operations. The company said the development will replace production from the Andoom mine as it approaches the end of its operating life, while lifting Weipa's combined annual capacity to approximately 44 million tonnes from about 38 million tonnes currently.
The investment strengthens Rio Tinto's position in the global aluminium supply chain, where bauxite is refined into alumina before being processed into aluminium used in transport, construction, packaging and industrial equipment. Weipa is a major source of bauxite for international customers and Australian alumina refineries, making the continuity of its operations important to both export markets and domestic manufacturing.
Rio Tinto said the US$1.9 billion capital commitment includes US$150 million approved for early works in 2025. Construction is scheduled to accelerate in 2027, with the company targeting initial bauxite production in 2029 and full production in 2032. Those dates remain project targets rather than completed operational milestones, and the investment forms part of the group's existing medium-term capital expenditure guidance.
The Kangwinan development will be situated approximately 15 kilometres southeast of the Amrun mine, around 40 kilometres south of Weipa. A new 15-kilometre conveyor system will transport mined bauxite to expanded stockyard facilities and the existing Amrun wharf, where upgrades will allow larger vessels to load ore for shipment. Rio Tinto said the infrastructure improvements are intended to increase transport efficiency and reduce freight costs across the operation.
The company expects the construction phase to support more than 1,300 jobs and provide opportunities for local contractors, suppliers and regional businesses. Once developed, Kangwinan is expected to help sustain Rio Tinto's existing residential workforce of approximately 1,500 people in Western Cape York, where mining remains a major source of employment and economic activity.
Rio Tinto Aluminium & Lithium Chief Executive Jérôme Pécresse described the investment as a commitment to the long-term future of Weipa and the company's integrated aluminium business. He said the project would strengthen the region's mining operations while creating opportunities for local communities and businesses connected to the industry.
The announcement also comes as Rio Tinto moves to consolidate its bauxite interests in Western Cape York. In September, the company agreed to acquire the neighbouring Aurukun Bauxite Project from Glencore and Mitsubishi, subject to government approvals. Rio Tinto said the combination of Amrun, Kangwinan and the proposed Aurukun development could support its regional mining operations well beyond the middle of the century.
Kangwinan is also intended to help offset the planned end of production at Rio Tinto's Gove bauxite mine in the Northern Territory in 2029. The investment therefore forms part of a broader effort to maintain reliable ore supplies as older Australian mining assets approach closure and the company adjusts its production network.
The project is being developed on lands associated with several Traditional Owner groups, including the Wik and Wik Waya, Alngith, Peppan and Wathayn peoples. Rio Tinto said the name Kangwinan was chosen at the request of Wik Waya Traditional Owners and reflects a figure associated with their cultural traditions. The company has committed to continued consultation over cultural heritage, waterways, access routes and opportunities for Indigenous communities to participate in the development.
Environmental approvals for the project were previously obtained through the Queensland and Commonwealth-approved South of Embley Environmental Impact Statement. Rio Tinto said it will continue working with Traditional Owners and relevant authorities as development proceeds, while the proposed Aurukun acquisition and any subsequent project integration remain subject to separate regulatory considerations.
The company estimates the Kangwinan investment could deliver an internal rate of return of approximately 22%, based on third-party market forecasts. That estimate reflects Rio Tinto's project assumptions and is not a guaranteed financial outcome, with actual returns dependent on construction costs, operating performance and future bauxite market conditions.
The investment reinforces Queensland's role in Australia's mineral export economy while providing Rio Tinto with replacement production capacity at a time when several established mines are nearing the end of their operating lives. With funding committed and major infrastructure plans outlined, the project's next phase will focus on construction delivery, local participation and maintaining bauxite supply to aluminium producers.