Chalco, China’s state-owned aluminium company, will on Friday sign an agreement with indigenous landowners in Australia paving the way for a A$2.9bn (US$2.4bn) bauxite mining project, one of China’s most significant mining investments abroad.
The agreement followed lengthy negotiations between Chalco, the world’s second-largest producer of aluminium, and the indigenous parties of the Aurukun region in northern Queensland.
It comes as Chinese companies have been stepping up their efforts to acquire deposits in Australia and secure resources to power the economy.
Beijing has lobbied the Australian and Queensland governments to support the Chalco project, requesting financial backing for infrastructure and help in the talks with the traditional landowners.
Chinese companies have faced criticism for their handling of sustainable development and social issues in Africa, Asia and elsewhere, and their ability to meet international standards in overseas projects.
Gina Castelain, a representative for the Aboriginal people in the negotiations, said that reaching an agreement had proved intense but “it’s time for us to move on”.
“There are real opportunities here to create employment and benefit the community,” she said, adding: “We’re very keen to have a good working relationship with Chalco.”
The indigenous land use agreement covers issues such as royalties andenvironmental protection. A senior Chinese delegation comprising representatives from both Chalco and the Queensland government is expected in Aurukun today for the signing.
Chalco plans to exploit the mine deposit as well as build an aluminium smelter.
Following an 18-month bidding process, Chalco won a tender last year to develop the bauxite site.
Queensland is also committed to spending A$300m to develop the region’s transport infrastructure and add a bauxite loading facility.
However, the deal was conditional upon subsequently negotiating an agreement with the local Aboriginal people.
Chalco is now expected to conduct further feasibility and environmental impact studies before giving the final go-ahead to a project that will involve the construction of a A$2bn smelter.
The bauxite mine is expected to yield about 6.4m tonnes annually.
The Aurukun project dates back to the 1970s but never came to fruition, prompting calls four years ago from politicians and some mining companies for the scrapping of the initial mining lease.
Aurukun was finally put up for tender after the Queensland government pushed through legislation in 2004 to cancel the unexploited lease that was at the time held by Alcan of Canada, which it inherited when it took over Pechiney of France.