Cape Alumina Limited Reassess Future of Pisolite Hills Project in Queensland

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Researched by Industrial Info Resources Australia (Perth, Australia)--Cape Alumina Limited (ASX:CBX) (Brisbane, Queensland) will reassess the future of its Pisolite Hills Bauxite Mine and Port projects following a recent decision by the Queensland government to ban all mining in the Steve Irwin Wildlife Reserve. The Pisolite Hills project originally had been planned to begin construction in 2014, but due to environmental issues the timeline for the project has been continually deferred. The proposed mine and processing plant is located approximately 37 miles (60 kilometers) northeast of Weipa, Queensland.

Upon completion, Pisolite Hills was expected to utilize three 350-ton-per-hour beneficiation plants to produce approximately 7.5 million tons per year of bauxite for export. The processed bauxite was then to be transported via a 30-kilometer overland conveyor to a proposed, dedicated barge-loading facility, which included the construction of a dedicated stockpile and storage facility with a barge loader to export 7.5 million tons per year of bauxite.

The total investment value of the mine and port combined was expected to be about $358 million (AUD$396 million), with large amounts of capital already outlaid to cover the costs of project development.

"The company has spent in excess of AUD$20 million on this project, including several million dollars since we reactivated the project last year," said Graeme Sherlock, the limited managing director for Cape Alumina.

Cape Alumina Limited is now actively seeking legal advice to potentially challenge the Queensland government's decision.

Not only is this decision bring bad news for Cape Alumina, but according to one of Cape Alumina Limited's recent announcements, it also is expected to hurt the Queensland economy. Cape Alumina Limited said that the Pisolite Hills project would generate $1.09 billion (AUD$1.2 billion) in new economic activity for the Queensland economy, hundreds of new jobs during construction and various levels of community infrastructure.

Cape Alumina Limited's management will now actively meet with the Queensland government to discuss the future of Pisolite Hills and its secondary Bauxite Hills project. If there is no change to the Queensland government's decision, it is expected that Bauxite Hills will become Cape Alumina Limited's flagship project.

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