Rio Tinto to invest $2.7 bn in Canadian smelter operations
02 Dec 2011
Anglo-Australian miner Rio Tinto yesterday said that it would invest a further $2.7 billion in its Canadian Kitimat aluminium smelter operations, despite the low global demand that forced it to sell some of its other aluminum assets.
London-based Rio Tinto, which acquired Montreal-based aluminum giant Alcan for $38.1-billion in 2007, will make the investment to raise the smelter's production capacity by more than 48 per cent to about 420,000 tons of aluminium a year.
The $3.3-billion Kitimat aluminium project, located in northern British Columbia, will be completed in 2014.
Rio Tinto is betting on China and other Asian countries to lead the expected demand for aluminium due to their booming auto and construction industry although prices for the light-weight industrial metal has nosedived since the recession.
"Once completed, Kitimat will be one of the most efficient and lowest-cost smelters in the world, and will better position us to serve the rapidly growing demand for aluminium in the Asia-Pacific market," said Rio Tinto Alcan chief executive Jacynthe Cote.
Rio Tinto recently spent nearly $2.3 billion on expansion of the Gove bauxite mine and alumina refinery in Queensland, Australia, and $1.1 billion on the first phase of a plant in Quebec. Both these assets came with the acquisition of Alcan.
