Rusal looks to Fiji as source of bauxite supplies

Rusal has thrown up the potential for Fiji to become a new source of bauxite to cover its needs at the operation, of which it owns 20 per cent, with Rio Tinto holding the remaining 80 per cent.

In meetings this week with Fiji's Ministry of Lands and Mineral Resources, a Rusal delegation said the Russian group wanted to explore potential bauxite mining and export opportunities in the country.

Queensland Alumina is currently wholly supplied by bauxite that comes from Rio Tinto's Weipa/Ely operations in Queensland, with the only other regional choice for Rusal being Rio Tinto's Gove operation in the Northern Territory.

Generally, about four to six tonnes of bauxite is consumed in the making of the two tonnes of alumina it takes to make one tonne of aluminium.

Rio Tinto's control over Australia's north-eastern bauxite/alumina industry became complete in 2007 with its acquisition of Canada's Alcan.

The Fiji option under investigation by Rusal comes as the privately held Chinese aluminium group Xinfa and a local group, Aurum, start mining at an initially small-scale bauxite operation at Nawailevu on Vanua Levu, Fiji's second-biggest island.

Xinfa is an 18 per cent shareholder in the ASX-listed Cape Alumina, the group that is planning a development of its Bauxite Hills project on west Cape York, to the north of Rio Tinto's Weipa operation.

Cape Alumina had planned an earlier development of its Pisolite Hills bauxite project on Cape York but that fell victim to Queensland's new laws protecting "wild rivers".

Rusal has raised the prospect that it could work with the Xinfa/Aurum partners on developing a new bauxite industry in Fiji.

Fiji was last a bauxite producer from operations on Vanua Levu in the early 1970s.

Apart from possibly turning to Fiji for its bauxite needs at Queensland Alumina, Rusal has previously flagged its interest in bauxite mining opportunities in Indonesia and Vietnam, again as an alternative to supplies from the Rio Tinto "system".