SYDNEY, June 10 -- Aluminum Corp. of China Ltd. (2600.HK), or Chalco, the listed unit of Aluminum Corp. of China, or Chinalco, is back in talks with Rio Tinto Ltd. (RTP) to jointly expand the Yarwun 2 refinery to process bauxite from Chalco's Aurukun project in Queensland state, Thursday's Australian Financial Review says it has learned from unnamed industry sources.
The paper had said Wednesday that Chalco was set to put its $3 billion bauxite project on hold as a result of the Australian government's proposed resource super profits tax and as it struggles to make the Aurukun development viable. It said Chalco was expected to lobby Queensland Premier Anna Bligh to amend the project's lease terms, which require an alumina refinery to be built near the site, and that Chalco might look to mine the ore and send it to China for processing. A company official at Chinalco later told Dow Jones Newswires that Chalco has no plan to withdraw from the project, though it is reviewing "certain" aspects of the deal.
Thursday's report in the Australian Financial Review says Bligh has warned Chalco it risks losing the project if it doesn't commit to processing the ore near the site.
It says Chinalco and Rio Tinto are working on a new deal that could see them merge their adjacent bauxite operations at Aurukun and Weipa or invest in a US$1.8 billion expansion of the Yarwun 2 refinery.