Rio Tinto, Alcoa step aside for Australia’s largest national park
Miners Rio Tinto (ASX:RIO) and Alcoa (NYSE:AA) agreed Tuesday to ditch a 40-year-old agreement for a joint project in Australia, handing back more than 175,000 hectares of prime conservation land where the government plans to create Dow Under’s largest national park.
The move, which has likely prevented clashes with environmentalists and locals, means the firms will return the land they have held since 1971 to West Australia and completely abandon plans to build a major bauxite mine and an alumina refinery in the area.
CEO Sam Walsh said in a statement that the companies have made such decision around the conservation of Mitchell Plateau as part of its long-standing and ongoing commitment as a member of the West Australian community.
“While the Mitchell Plateau bauxite resource is likely to hold value in the future, the State Agreement Act required the development of an alumina refinery which has always proven to be economically challenging,” Walsh said.
It is believed the miners were struggling o make the project viable given the high development costs in the isolated region and how depressed aluminum prices are. The commodity is, in fact, trading close to its lowest level since the global financial crisis.
The price crunch got worse in December as more than 412,000 tonnes of primary metal “disguised’’ as semis flooded the Asian market, a 140% interest increase on a year earlier, The Australian reported.