Rio Tinto Backs $1.9bn Kangwinan Bauxite Project

Rio Tinto (LON: RIO), the global miner, will invest $1.9bn to develop the Kangwinan bauxite project in Queensland, it said today. The mine adds 20 million tonnes of annual capacity at Weipa, with first output targeted for 2029 and full production by 2032.

The news came before London opened, so the shares have not yet traded on it. They ended yesterday at 6260p, down 3.42% on the day and 13.46% over a month, which leaves them 24.65% below the 8308p closing high of the 2nd of June. They are still up 4.44% this year.

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Kangwinan is a replacement project. It takes over from the Andoom mine near Weipa, which reaches the end of its life this decade, and lifts Weipa’s annual capacity to about 44 million tonnes from around 38 million today. It also helps offset the planned end of production at the Gove mine in the Northern Territory in 2029.

Jérôme Pécresse of Rio Tinto described the scale of the commitment.

The project represents the most significant new mining investment in Queensland in recent years.

Jérôme Pécresse, Rio Tinto

The $1.9bn includes $150m of early works approved in 2025, and the replacement capital expenditure is incorporated within Rio’s mid-term capital guidance. The expected internal rate of return, the annual return the project should earn, is about 22%, based on third-party market forecasts as at the fourth quarter of 2026.

The new production centre sits 15km south-east of the Amrun mine, itself 40km south of Weipa town. A 15km conveyor will carry ore to the wharf, which is being expanded for capesize vessels, a class of large bulk carriers. Construction ramps up in 2027 with more than 1,300 construction jobs.

Last month Rio agreed to buy the adjacent Aurukun Bauxite Project from Glencore, which holds 70%, and Mitsubishi, which holds 30%, subject to government approvals.

Rio’s next results are expected on the 18th of February.