Rio Tinto Plans $1.8B Alumina Refinery Expansion

Anglo-Australian miner looks to double production at Queensland refinery to 3.4 million metric tons by 2011.

MELBOURNE, Australia (AP) - Anglo-Australian mining company Rio Tinto Ltd. said Tuesday it plans to spend $1.8 billion to double the annual production of its Yarwun Alumina Refinery in Queensland.

The expansion will raise the annual output at the Gladstone plant to 3.4 million metric tons a year from 1.4 million tons by 2011, the company said in its release to the Australian Securities Exchange.

''The expansion of the Yarwun Alumina Refinery is one of the most significant investments made by Rio Tinto in recent years,'' said Rio Tinto Chief Executive Tom Albanese.

Rio had previously placed its expansion plans at Yarwun on hold, citing cost pressures, and the decision to go ahead with the project may damp persistent speculation the miner is mulling a bid for Canadian aluminum giant Alcan Inc., analysts told Dow Jones Newswires.

Rio Tinto and rival BHP Billiton Ltd. have both been at the center of speculation over a possible buyout of Alcan.

But while other rivals such as Switzerland's Xstrata PLC and Brazil's Companhia Vale do Rio Doce have carried out major acquisitions to maximize output during the China-driven boom in demand, Rio Tinto and BHP have so far preferred to focus on their own expansion projects.

Rio Tinto said work on its expansion at the alumina refinery will start in the third quarter of 2007 and is expected to take about three years to complete. First shipments from expanded capacity are expected in the second half of 2010, it said.


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