Oct. 30 - RUSAL has approached Queensland with an expression of interest in taking over the long-delayed $3 billion Aurukun bauxite project.
The state government yesterday confirmed reports from Moscow that Russia's global aluminium bear initiated discussions in August after China's state-owned aluminium company, Chalco, withdrew from an agreement to build a mine at Aurukun and an alumina refinery at Abbott Point.
The Chalco deal followed the government's reclamation of the Aurukun concessions from industry leader Alcan in the wake of its controversial acquisition from Pechiney in February 2004. The French company had sat on the mining rights for Aurukun since 1975.
The terms of the Chalco deal required China Inc to invest $3bn on a 10 million tonnes a year mine and a further $2.2bn on a 3.3mtpa refinery.
Chalco walked away from that deal in July, extending 35 years of frustration and delay in developing what is a world-class resource that sits at the southern extension of Rio Tinto's fabulous Weipa operations.
It is understood that Rusal met state Natural Resources Minister Stephen Robertson on August 25 and the Russian aluminium company subsequently presented an aggressive case for its acquisition of the Aurukun leases to the Queensland co-ordinator general, Graeme Newton.
While refusing to confirm its approach to the Bligh government, Rusal yesterday indicated that any interest it had in Aurukun would be for its use as a feedstock for the Queensland Alumina joint venture.
"Rusal has a long-term requirement for bauxite to process at its Queensland Alumina joint venture," Rusal chairman John Hannagan said yesterday.
"The company will investigate all opportunities for competitive bauxite supply to QAL. Rusal has no interest in exporting bauxite from Australia to Russia (a totally uneconomic exercise)".
Rusal owns 20 per cent of QAL, which is the world's biggest alumina refiner.
The balance of of the project is controlled by Anglo-Australian miner Rio Tinto, which is said to be watching closely the progress of any discussion about the status of Aurukun. Given the proximity of the undeveloped deposit to Weipa, Rio would see itself as the natural developer of Aurukun.
But it is believed Rusal is acting alone, rather than with Rio Tinto, in its assessment of Australian bauxite options that include Aurukun.
There has been speculation that BHP Billiton is somehow connected to Rusal's pitch. This speculation is wrong and the Global Australian has no knowledge of Rusal's interest in sourcing raw materials from Queensland's northern Cape.
Given the Chalco deal was conditional on building a new refinery at Gladstone, an agreement that would allow Rusal to deliver Aurukun product to the QAL refinery at Gladstone would represent a downshift in the government's aspirations for investment in new value-adding capacity.
The controversy that would probably be triggered by allowing Rusal to take over the Aurukun mining concessions might be a disincentive for the state government's further engagement in discussions with the Russian company.
Rusal is controlled by Russian oligarch Oleg Deripaska, a billionaire who carries some notoriety both at home and abroad.
That said, Rusal was one of 10 aluminium industry standards that were invited to join the Aurukun Industry Investment Group after the decision to take the project away from Alcan in 2004.
The state government yesterday confirmed reports from Moscow that Russia's global aluminium bear initiated discussions in August after China's state-owned aluminium company, Chalco, withdrew from an agreement to build a mine at Aurukun and an alumina refinery at Abbott Point.
The Chalco deal followed the government's reclamation of the Aurukun concessions from industry leader Alcan in the wake of its controversial acquisition from Pechiney in February 2004. The French company had sat on the mining rights for Aurukun since 1975.
The terms of the Chalco deal required China Inc to invest $3bn on a 10 million tonnes a year mine and a further $2.2bn on a 3.3mtpa refinery.
Chalco walked away from that deal in July, extending 35 years of frustration and delay in developing what is a world-class resource that sits at the southern extension of Rio Tinto's fabulous Weipa operations.
It is understood that Rusal met state Natural Resources Minister Stephen Robertson on August 25 and the Russian aluminium company subsequently presented an aggressive case for its acquisition of the Aurukun leases to the Queensland co-ordinator general, Graeme Newton.
While refusing to confirm its approach to the Bligh government, Rusal yesterday indicated that any interest it had in Aurukun would be for its use as a feedstock for the Queensland Alumina joint venture.
"Rusal has a long-term requirement for bauxite to process at its Queensland Alumina joint venture," Rusal chairman John Hannagan said yesterday.
"The company will investigate all opportunities for competitive bauxite supply to QAL. Rusal has no interest in exporting bauxite from Australia to Russia (a totally uneconomic exercise)".
Rusal owns 20 per cent of QAL, which is the world's biggest alumina refiner.
The balance of of the project is controlled by Anglo-Australian miner Rio Tinto, which is said to be watching closely the progress of any discussion about the status of Aurukun. Given the proximity of the undeveloped deposit to Weipa, Rio would see itself as the natural developer of Aurukun.
But it is believed Rusal is acting alone, rather than with Rio Tinto, in its assessment of Australian bauxite options that include Aurukun.
There has been speculation that BHP Billiton is somehow connected to Rusal's pitch. This speculation is wrong and the Global Australian has no knowledge of Rusal's interest in sourcing raw materials from Queensland's northern Cape.
Given the Chalco deal was conditional on building a new refinery at Gladstone, an agreement that would allow Rusal to deliver Aurukun product to the QAL refinery at Gladstone would represent a downshift in the government's aspirations for investment in new value-adding capacity.
The controversy that would probably be triggered by allowing Rusal to take over the Aurukun mining concessions might be a disincentive for the state government's further engagement in discussions with the Russian company.
Rusal is controlled by Russian oligarch Oleg Deripaska, a billionaire who carries some notoriety both at home and abroad.
That said, Rusal was one of 10 aluminium industry standards that were invited to join the Aurukun Industry Investment Group after the decision to take the project away from Alcan in 2004.
