Rio Tinto set to decide on expansion of Mongolia copper mine

"We're seeing a slowdown in demand as the global economy slows, particularly commodity intensive economies like China", Russ Koesterich, global chief investment strategist at BlackRock Inc., the world's largest money manager, said Wednesday in a Bloomberg TV interview. With annual production of 22.8 million tonnes, Amrun's output will offset depletion at the East Weipa deposit. 

The mining giant has changed the name of the mine to the Aboriginal word Amrun, with the project involving construction of a bauxite mine as well as processing and port facilities. "Players like BHP are down 2 per cent and Rio Tinto is not far behind" said Chris Conway, head of research and trading, Australian Stock Report. The initial production phase will increase exports from Cape York by 10 million tonnes per year. Rio is becoming confident the market could move back into deficit by the end of 2017-2018, Jean-Sebastien Jacques, chief executive officer for copper and coal, said Thursday in an interview at the Bloomberg Address. Clifford also expects Rio's OT UG copper project and Silvergrass iron ore project to be approved in the first half of 2016. "However, if you produce good quality bauxite, and Weipa is very good quality, then you remain relatively unaffected and can generate a high margin throughout the cycle", said analysts at Barclays. Operating costs are expected to be lower than current unit costs at its Australian bauxite mines, he said. "We are establishing Cape York bauxite as the product of choice for the Chinese seaborne market with consistent quality, security of supply and strong technical marketing support". Rio Tinto reported a net profit of $806 million for the six months through June, down from $4.4 billion a year earlier. Instead, he said that the company was focused on "tier-one assets" and that its optimistic long-run outlook on bauxite gave management "the confidence to invest". Rio is also expected to push ahead with an underground expansion at the Oyu Tolgoi mine in Mongolia in the next two years. Prices for bauxite, which is used to make aluminium, have soared in recent years as China's supply of the material has deteriorated, and exports from Indonesia were halted under an export ban.