Glencore in talks to mine huge Australian bauxite deposit

Thu Aug 28, 2014 12:18am EDT
 
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SYDNEY Aug 28 (Reuters) - Glencore will hold talks with the government of the Australian state of Queensland over developing vast bauxite reserves that have remained untapped for decades despite a series of attempts by mining companies to get a project off the ground.

Mining giant Glencore on Thursday said it had been selected by the government as the "preferred proponent" for the Aurukun Bauxite Project in northern Australia and would now look to finalise a state development agreement and land use pact with indigenous landowners.

Proposals over the years to exploit the reserve of the aluminium ore have been stymied by issues over indigenous land rights and ownership.

The bauxite rests underneath traditional land of the Wik and Wik Way people in the impoverished Cape York region, which is wracked by unemployment.

Alcan of Canada, acquired by Rio Tinto in 2007, was stripped by the government of leases on the deposit in 2004 after failing to develop a mine over a 29-year period.

Questions over the relatively low quality of the 439-million-tonne reserve have done little to deter interest from sector heavyweights.

Aluminum Corp of China in 2007 agreed to develop the reserves as part of a $2.5 billion alumina and aluminium-making project under consideration at the time, but later scrapped it after the global financial crisis spread to commodity markets.

Other companies that have also looked at exploiting the reserves over the years include BHP Billiton , Alcoa and Mitsubishi Corp. (Reporting by James Regan; Editing by Joseph Radford)