Rio Tinto Explores Development of Bauxite Mines in India

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Researched by Industrial Info Resources (Sugar Land, Texas)--Rio Tinto (NYSE:RTP) (London), a leading international mining conglomerate, plans to develop bauxite mines in India as a precursor to a proposed investment of $2.2 billion to develop a greenfield alumina refinery and smelters in the country. It is likely to scout for bauxite mines in the states of Andhra Pradesh and Orissa, which are known for their rich, proven bauxite reserves. The firm is also reportedly in talks with domestic companies to share the bauxite reserves.

Rio Tinto plans to produce 1.4 million tons per year of alumina and construct a 2.5 million-ton-per-year smelter to facilitate domestic production of aluminum. The firm is exploring joint-venture opportunities with state-owned Coal India Limited (Kolkata, West Bengal) to secure a supply of coal to power the proposed smelter plants.

Rio Tinto, which is also exploring mining prospects of other minerals, primarily iron ore, in eight states in the country, entered into an agreement with state-owned NMDC Limited (BSE:526371) (Hyderabad, Andhra Pradesh) in August to explore domestic and international mineral reserves. The companies planned to set up a joint working group to ferret out prospective mining properties followed by the establishment of a 50:50 joint venture to undertake mining activities initially for iron ore and subsequently for other minerals. However, with the onset of the worldwide economic recession and the consequent slump in the demand for steel, Rio Tinto recently announced that it would curtail iron ore production by about 52 million tons, which amounts to 6% of the globally traded supply of iron ore.

In June, Rio Tinto applied for a mining lease for the Bunder diamond project in Bundelkhand, Madhya Pradesh, to develop the country's first world-class diamond mine. The firm announced an exploration target of 40 million to 70 million tons with a mineral grade in the range of 0.3 carats per ton to 0.7 carats per ton for diamond mineralization in Bunder. The firm has spent more than $19 million evaluating the deposit and plans to spend an additional $30 million to support further evaluation.

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