Chinalco officially announced today that Australia's Aurukun bauxite resource development project has been unable to continue due to a number of unfavorable factors. Aluminum Corporation of China stated that it has conducted active consultations with the Queensland State Government in this regard and both parties agreed that the development agreement will terminate on its own after the expiration date (June 30, 2010).
On March 23, 2007, Aluminum Corporation of China and the State of Queensland Australia signed the Development Agreement between the Queensland Government and China Aluminum Corporation on the Aurukun bauxite project. In that year, China Aluminum successfully repelled several international bidders and became the first choice for a bauxite development project worth 2.9 billion Australian dollars (US$2.2 billion).
This time, China Aluminum announced that the project was blown out. The reason given was that the global aluminum industry market situation has undergone significant and unfavorable changes. Aluminum Corporation of China stated that under the framework of the development agreement, the Aolukun project was unable to continue due to a number of unfavorable factors, but the specific reasons for the aluminum industry did not specify. In fact, recent rumors about the resistance of China Aluminum Australia's bauxite project have been lingering.
According to foreign media reports, this project is mainly due to the Australian government intends to levy a super-profit tax on resources, resulting in a sharp decline in mining confidence, the Australian National Bank’s mining confidence indicators have plummeted. Australia’s announced plans to push high resource taxes, in addition to being opposed by the country’s mining companies, has also triggered concerns that the high taxes will affect the enthusiasm of foreign investors.
It is reported that after the Australian Government announced that it imposed a tax rate of up to 40% on the mining industry, eight development projects have been put on hold and the total value is worth A$55 billion. There are also sources who believe that due to rising costs, oversupply in the market, and the need to establish an expensive alumina smelter in Queensland, Chalco's project is difficult to implement, and the mining tax makes it worse.
From the perspective of China Aluminum, it does not seem that it intends to go home. The company stressed that after the termination of the development agreement, both China Aluminum and the Queensland government agreed to continue discussions on other ways to develop the Aurukun bauxite resources. Earlier, executives of China Aluminum stated publicly that China Aluminum is still conducting feasibility analysis and comparison of various projects for bauxite projects, of which Australia is also planning to levy high resource taxes.