Chalco halt blow to Cape mining

PLANS for mining development in Cape York Peninsula have been thrown into doubt after a decision by Chalco to delay construction of an alumina refinery in central Queensland.

Chalco was awarded a permit to mine bauxite deposits near Aurukun in 2004 on the condition it also built a $2.2 billion refinery at Abbot Point near Bowen.

According to a report in Australian Mining, the poor economic situation has affected global alumina markets.

Chalco Australia recently said it "remains committed to the feasibility study for the Aurukun bauxite project" which included the refinery.

Aurukun Shire Council chief executive officer John Bensch said the community wanted the mining project to proceed.

"If it is not going ahead it will have a negative impact," he said. "We’d certainly like to see the mine go ahead."

Chalco Australia is a subsidiary of the Aluminium Corporation of China Ltd or Chalco and is China’s largest producer of alumina and aluminium.

The Aurukun bauxite project is Chalco Australia’s first Australian investment.

If it proceeds, it will be the largest Chinese investment in Queensland.

Chalco did not respond to requests for comment yesterday and nor did Queensland Infrastructure and Planning Minister Stirling Hinchcliffe.

Western Cape Chamber of Commerce head Vance Wallin said he was "definitely concerned" at the impact of a delay on employment.

"We’ve had a fair downturn from the mining sector which has created a loss of indigenous employment," he said.

"Chalco was the top bidder and at the moment it seems like they are not delivering."

Mr Wallin said while there had been plenty of activity from Rio Tinto and Gulf Alumina, there had been little heard from Chalco.

There have been suggestions that agreement could be reached involving Chalco and other mining companies.

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