Rio Tinto (LSE:RIO) announced it will invest $1.9 billion to develop the Kangwinan bauxite project on the Western Cape York Peninsula in Queensland, a brownfield expansion designed to underpin the long-term future of its Weipa Operations.
The diversified miner, whose portfolio spans iron ore, copper, aluminium and lithium, said the project will add 20 million tonnes of annual bauxite production capacity, with first output targeted in 2029 and full production by 2032.
Kangwinan will replace output from the nearby Andoom mine as it reaches the end of its life this decade, lifting Weipa Operations' annual capacity to about 44 million tonnes from current production of around 38 million tonnes a year.
It will also help offset the planned end of production at the Gove mine in the Northern Territory in 2029.
Rio Tinto Aluminium & Lithium chief executive Jérôme Pécresse said the project is "a strong vote of confidence in Weipa, in the quality of its bauxite, the capability of its workforce, and the future of the communities and businesses closely connected to our operations."
The $1.9 billion capital estimate includes $150 million of early works pre-approved in 2025, and the investment is expected to deliver an internal rate of return of about 22%, based on third-party market forecasts as at the fourth quarter.
Rio Tinto said the replacement capital expenditure is incorporated within its mid-term capital guidance.
Kangwinan will sit 15 kilometres south-east of Rio Tinto's Amrun mine, linked by a 15-kilometre conveyor to expanded stockyard facilities and the existing Amrun wharf, which will itself be expanded to handle larger capesize vessels.
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Construction is set to ramp up in 2027, supporting more than 1,300 construction jobs, and the company said the project will help sustain its residentially based workforce of around 1,500 people in the Western Cape.
The announcement follows last month's agreement to acquire the adjacent Aurukun Bauxite Project from Glencore (70%) and Mitsubishi (30%), subject to government approvals, with Rio Tinto saying the combined Amrun, Kangwinan and Aurukun operations are expected to support Weipa Operations well beyond the middle of the century.
The Queensland project adds to a run of recent moves to secure the future of Rio Tinto's Australian aluminium value chain, following agreements covering the Bell Bay, Tomago and Boyne smelters.