Resource giants Rio Tinto and Alcoa have won a two-year extension on their plans to develop a massive bauxite deposit and alumina smelter in the Kimberley, despite Premier Colin Barnett casting doubts on the venture
Earlier this month Mr Barnett suggested the remote, costly, project was unlikely to ever be developed. However, he confirmed yesterday he had approved extra time to develop the bauxite deposit, 115km south-west of Kalumburu, surrounded by national parks.
"In response to a request from Rio Tinto the State Government has agreed to a two-year extension of the requirement for a development proposal under the State Agreement Act," Mr Barnett told _WestBusiness _.
"This maintains the status quo."
Rio declined to comment, but some analysts speculate the miner's persistence is in the hope that the Government will eventually relent on the secondary requirement to build a costly refinery and allow it to simply mine the less capital-intensive bauxite mine.
This would give it an alternative to the Queensland Weipa bauxite mine, which underpins all of Rio's aluminium operations
Rio is struggling to extend the life of that mine because of environmental and cost issues.
Similarly, the WA plan has infuriated the local environment movement with groups such as Environs Kimberley calling on the WA Government to ban all bauxite mining in the area, a move industry opposes and worries will set a precedent.
Internally, Rio has been working on handing back some of the more sensitive areas of the venture, parts of which comprise lower grades of ore, in a bid to win environmental support for the broader project.
The miners' agreement with the Government is subject to the Alumina Refinery (Mitchell Plateau) Agreement Act 1971, which grants the right to develop the bauxite reserves in tandem with building an alumina refinery in the region.
The latest extension, which brings with it minor spending requirements, marks a series of similar moves to the deadline last decade.
But the deposit is so isolated that plans to develop it are fraught. There is no existing infrastructure for a world-scale bauxite mine and alumina refinery operation, which requires huge volumes of water and electricity.
It was for this reason Mr Barnett suggested the plan was unlikely to ever work, and flagged a possible return of the resource to taxpayers.