Rio Tinto Is Betting Millions on Growth in the Aluminum Industry

---

Researched by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). Camalco, a subsidiary of Rio Tinto Plc (NYSE:RTP) (London, England), is strengthening its position as a giant in the aluminum industry with the investment of over $1.5 billion on two mega projects in Australia.

The first of these two mega projects is an alumina refinery, with the capability of producing 4 million tons of alumina annually. This greenfield project located in Gladstone, Australia will be built in two phases. The first phase calls for a refinery with a production capacity of 1.4 million tons per year with a price tag of $750 million. Subsequent phases would then expand the production capacity to over 4 million tons per year. Engineering, construction, and procurement (EPC) for this project was awarded to Bechtel Australia Pty. Construction of the Gladstone Alumina Refinery started early this year and is scheduled to be completed in three years, with the first product shipment scheduled for early 2005.

The second mega project in the pipeline for Comalco is the $445 million expansion of the Boyne Island Aluminum smelter. The Boyne Island Smelter, Australia's largest, is gearing up to expand its capacity to 535,000 tons per annum pending regulatory approval. In partial fulfillment of the environmental regulations, Comalco awarded an Environmental Impact Statement (EIS) contract to Sinclair Knight Merz (SKM). SKM has since completed the EIS, which as of April 27, 2002 is available for public comments. Expansion of the Boyne Island smelter will commence in 2003 and be completed in 2005.

The Boyne Smelter (Boyne Island, Australia) is owned and operated by Boyne Smelters Limited (BSL) with Comalco as the majority shareholder. Rio Tinto recently announced its intention to purchase Kobe Steel's interest in BSL for $78.5 million. This will increase Rio Tinto's stake in BSL up to 59.38%. This three-reduction line smelter has been in operation since 1982. With a staff of approximately 1,300 people, it produces 500,000 tons per of primary aluminum each year, earning close to $1 billion (USD) in exports.

"We are tracking close to $9 billion in aluminum sector project development worldwide," says Joseph Govreau, Manager of Metals & Minerals for Industrialinfo.com. "Aluar Alumino Argentina, Mozal, Pechiney, Alcoa, Alcan, Jamalco, Tomago, Dubai, Alugulf, and Hillside Aluminium are just a few companies with multimillion dollar projects in the planning stage or under construction that Industrialinfo.com is tracking, in addition to global trends in the aluminum industry."