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MELBOURNE - Mining giant Rio Tinto (market capitalization: $97.64 billion) has commenced work on the Norman Creek access project at its Amrun bauxite mine in Queensland’s Cape York Peninsula after approving a $180 million investment, according to a company press release. As a prominent player in the Metals & Mining industry with strong financial health according to InvestingPro analysis, Rio Tinto continues to expand its operations.
The project will enable mining of the Norman Creek region, which contains approximately half of Amrun’s currently declared ore reserves of 978 million tonnes. Construction has begun on key infrastructure including a 19-kilometer haul road, camp accommodation, and a communications tower. With an EBITDA of $18.21 billion in the last twelve months, Rio Tinto demonstrates the financial strength to support such significant infrastructure investments. Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and analysis tools.
First production from Norman Creek is targeted for 2027, with full construction expected to be completed in 2028. The investment is classified as replacement capital and has been factored into Rio Tinto’s group capital guidance.
"Norman Creek is another important step in securing the long-term future of our Weipa operations," said Armando Torres, Rio Tinto Pacific Operations Aluminium Managing Director.
The company has also started early works and a final feasibility study on the Kangwinan project, which could increase annual bauxite production capacity from Rio Tinto’s Weipa Southern operations by up to 20 million tonnes, in addition to the current 23 million tonnes. The Kangwinan project would replace output from the Andoom mine on Cape York and the Gove mine in the Northern Territory, both expected to close toward the end of the current decade.
If approved, the Kangwinan project could begin production as early as 2029 and would expand export capacity through the Amrun port. The project was named Kangwinan at the request of Traditional Owners, the Wik Waya people. Based on InvestingPro’s Fair Value analysis, Rio Tinto currently appears undervalued, suggesting potential upside for investors as these expansion projects progress. For comprehensive analysis, including detailed financial health metrics and future growth projections, explore Rio Tinto’s Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Rio Tinto has signed a binding agreement to acquire a 51% stake in the Salares Altoandinos lithium project in Chile, in partnership with the Chilean state-owned mining company ENAMI. The deal involves up to $425 million in cash and non-cash contributions from Rio Tinto, including their Direct Lithium Extraction Technology, to advance the project through various investment stages. Additionally, Rio Tinto has announced an investment of CA$7.6 million in ore sorting technology at its Lac Tio mine in Quebec, with support from the Quebec government, aiming to enhance efficiency and reduce emissions. On the analyst front, Deutsche Bank and Berenberg both downgraded Rio Tinto from Buy to Hold, citing concerns over iron ore prices and potential headwinds. Deutsche Bank adjusted its price target to GBP51.00, while Berenberg lowered theirs to GBP47.00. These developments highlight the company’s strategic moves and the cautious stance of analysts regarding its stock.
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