Rio Tinto (RIO.US) plans to acquire Australian bauxite owned by Glencore and Mitsubishi to fill capacity gap

The Zhitong Finance App learned that mining giant Rio Tinto (RIO.US) issued a statement and agreed to acquire the Aurukun (Aurukun) bauxite project in northeastern Australia from Glencore and Mitsubishi Development. A Rio Tinto spokesperson said, “The purchase price has not been disclosed, and the deal is still pending approval from the Queensland Government and other relevant Australian regulators.”

The statement said that the Orukun project currently holds a mineral development license, and the mining lease has not yet been approved. The project is close to Rio Tinto's ongoing bauxite mine in western Cape York. Bauxite mined in Rio Tinto's existing mines is first processed into alumina, then transported to smelters for further smelting into metallic aluminum.

The acquisition comes at a time when Rio Tinto plans to close its Gove (Gove) bauxite mine in the Northern Territory by the end of this decade, while another East Weipa (East Weipa) mine in Queensland ceased production in 2024.

According to reports, the global aluminum market supply pattern is undergoing profound changes. Gregory Shearer, head of basic metals and precious metals strategy at J.P. Morgan Chase, pointed out in his latest research report that whether the situation in the Middle East escalates or downgrades, it may push up aluminum prices. He explained, “Another escalation of the conflict and restrictions on navigation across the strait may cause more damage to aluminum smelting infrastructure and trigger more production stoppages due to the shortage of alumina; on the other hand, a more clear and lasting downgrade situation may also be a support, as it will more completely eliminate the tail risks of the macroeconomy and boost potential demand, but it still cannot change the fact that aluminum market supply has been severely impacted this year.”

Based on this judgment, J.P. Morgan predicts that aluminum prices will reach 3,800 US dollars per ton in the third quarter of 2026, 3,700 US dollars in the fourth quarter, then gradually decline to 2,750 US dollars per ton by the fourth quarter of 2027. Currently, the LME aluminum futures price is close to $3,312 per ton.