Rio Tinto to Boost Amrun Bauxite Mine Capabilities with $180 Million Investment

Rio Tinto invests $180 million to enhance its Amrun bauxite mine capabilities. Analysts predict a 20.70% potential upside for RIO shares based on current forecasts. RIO maintains an "Outperform" status with a GF Value suggesting a modest 3.28% upside. The project will unlock access to half of the mine's 978 million tonnes of ore reserves, with completion expected by 2028.

Rio Tinto (ASX, LSE: RIO) has approved a $180 million investment in the Norman Creek bauxite project on Queensland’s Cape York Peninsula, aiming to unlock nearly half of the 978 million tonnes in reserves across its Amrun operation [1]. The investment, recorded as replacement capital and already included in the company’s capital forecast, will significantly enhance the mine's capabilities.

Construction is already underway, with a 19-km haul road, camp facilities, and a communications tower being built. First production is targeted for 2027, with full project completion expected by 2028. The Amrun mine, which began operations in 2018, recently reached full production capacity for the first time [1].

The Norman Creek project is part of Rio Tinto's broader strategy to secure the long-term future of its Weipa operations and the benefits that mining brings to communities in the region, Queensland, and the nation. "Norman Creek is another important step in securing the long-term future of our Weipa operations, and the benefits that mining brings to communities in the region, Queensland, and the nation," said Rio Tinto Pacific Operations Aluminium Managing Director Armando Torres [1].

Bauxite is primarily used as the main raw material for producing alumina, which is then used to create aluminum metal. The Norman Creek project will not only increase production but also expand export capabilities through the Amrun port. In addition to the Norman Creek project, Rio Tinto has begun early works and a final feasibility study on the Kangwinan project, also located within the Amrun mine. If approved, Kangwinan would add up to 20 million tonnes of annual bauxite capacity, almost doubling current output, and expand export capabilities through the Amrun port [1].

Analysts predict a 20.70% potential upside for RIO shares based on current forecasts, while the company maintains an "Outperform" status with a GF Value suggesting a modest 3.28% upside [2]. The project is expected to unlock access to half of the mine's 978 million tonnes of ore reserves, with completion expected by 2028.

References:

[1] https://www.northernminer.com/news/rio-tinto-oks-180m-expansion-at-amrun-bauxite-mine/1003881289/
[2] https://www.tradingview.com/symbols/LSE-RIO/