China's aluminium demand will rise: Rio Tinto

Rio Tinto Alcan says China's increasing industrial demand will underpin the Australian aluminium industry.

Chinese company Chalco yesterday announced its decision to pull out of a proposed bauxite mine at Aurukun in Queensland's western Cape York.

Chalco says the decision was made due to a decline in the aluminium industry.

But RioTinto chief financial officer Phillip Strachan says he expects demand from China is likely to increase by 22 per cent this year.

Mr Strachan says aluminium prices have bounced back from last year's lows but he says Rio Tinto's balanced position should cushion the company from any low prices in the future.

Rio Tinto is continuing with the expansion of its refinery in Yarwun near Gladstone in central Queensland, which will increase annual output by two million tonnes.

Aurukun 'disappointed'

Meanwhile, Aurukun Shire Council Mayor Neville Pootchemunka says the community was hoping the Chalco mine would proceed to help create jobs and business opportunities.

Mr Pootchemunka says he does not accept the reasons being put forward by the Government or Chalco for delaying the mine.

"I am disappointed by the whole process - there are a lot of opportunities that my people are looking forward to," he said.

"We waited so many years nearly 30 years - this process has been delayed and now are we going to wait for the next 30 years or so for the development of the mine?

"The community is not in the decisions that have to be made that has to be considered by the Queensland Government.

"We were in the first stage of the feasibility studies, we want to see the development to go ahead."

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