Rio Tinto could soon approve Queensland bauxite project

1st Jul 2014 15:54

London-listed mining stocks were pushed higher on Tuesday by an improvement in Chinese manufacturing activity, though Rio Tinto was a standout performer as analysts made positive comments on its bauxite assets in Queensland.After a site visit to Rio's aluminium subsidiary Alcan, Citigroup said that its 22m tonnes-per-annum (mtpa) South of Embley project near the Weipa bauxite mine on Western Cape York Peninsula could be approved later this year.Citi said that Rio's management are wanting to "capitalise on Indonesian export ban and increase exports to China (currently around 16mtpa)". All permits are said to be in place and studies are near completion so the project "could be approved as early as October", the bank said.Meanwhile, the Australian Financial Review said that Rio expects South of Embley to deliver returns similar to those of its the group's lucrative Pilbara iron ore operations."The go ahead on the project is not unexpected, particularly given the commodity lift-up as a result of the Indonesian ore export ban," according to analysts at Investec.Rio was trading 3.3% higher at 3,210.45p in afternoon trade, while the FTSE 350 mining index was up 2.6%.BC