A multi-billion dollar boost for QLD’s north

Queensland’s resource sector received a major boost last month with the development of a bauxite mine in Queensland’s Cape York set to go ahead as five firms were short-listed to detail proposals for the venture.

The bauxite lode near the Watson River at Aurukun, north of Cairns, is expected to worth more than $25 billion in untapped resources.

Deputy Premier Jeff Seeney said the development of the Aurukun bauxite resource was essential to the creation of a vibrant economic future for the Aurukun community, native titleholders and all Queenslanders.

Aluminium Corporation of China Limited (CHALCO) spent a reported $100 million on work of a previous lease over the Aurukun but cancelled the $3 billion deal in 2011, saying the previous Labor government's condition of building a refinery was unworkable.

“The [Anna] Bligh government’s failed strategy of demanding the establishment of a refinery made development of the resource uneconomic,” Seeney said.

“We want to ensure the economic benefits of this resource flow back into the Aurukun community.

“We will see these benefits through mining jobs and improvements to infrastructure and further benefits through businesses that could be established in Aurukun to service the mine.”

Seeney said the commercial terms of the mine were based on the state’s key objectives for the development, namely that the project should maximise the benefits and returns from the project to the native titleholders – the Wik and Wik Way people represented by the Ngan Aak-Kunch Aboriginal Corporation (NAK) – and the Aurukun Shire Council.

“The Newman Government will also ensure the project is delivered in a timely manner at no cost and no risk to Queensland, which will mean that all parties benefit,” he said.

Chalco, Rio Tinto, Cape Aluminia and Glencore International are all vying to develop the mine.

However a smaller player, venture company Australian Indigenous Resources, is also in the running meaning local Indigenous people have a chance to own a stake in the mine.

Indigenous leader Gerhardt Pearson and aluminium smelter entrepreneur John Benson are now planning the Indigenous stake in the start-up company, as well as nominating tradition owners to sit on the board.

"I can't yet talk about the size of the stake, but it will be significant and I want to make sure it is right so that we see this opportunity for the local community happens," Pearson told The Australian.

Traditional owner Sharon Ngallanetta said it would be a turning point for the Wik to gain ownership of a mining operation.

"I never thought I would see the day that the Wik would become actual miners," she said.

Seeney said the bid by the company was an important one.

"[Is is] A much smaller bid, but a bid that we think is very important because it provides an opportunity for local Indigenous people to own a stake in the operation," he stated.

"We are excited about the prospect of providing an opportunity for local Indigenous people to have an ownership stake in the operation of whatever mine is able to be developed there."

If Australian Indigenous Resources is successful in its bid the company would likely work alongside a multi-national firm Seeney said.

Aurukun Mayor Dereck Walpo said the mine will be the first major development in the area and will transform the community.

"We're going to have a better economy, autonomy, better developments, better education, better health," he told AAP.

"All in all we won't be depending on welfare anymore.

"Everyone's going to have a job – I feel so excited about it.

"Then I'd actually like to see Aurukun be the first community on Cape York that won't have any welfare issues.

"As mayor I will be negotiating with all of the proponents to ensure the best deal in terms of jobs for our young men and women to get them away from collecting welfare.”

The Couriermail reports that Rio Tinto is the frontrunner in the pitch, having the advantage of existing port access and water resources in the area.

Rival bidders would have to negotiate access to the Rio-owned facilities.

However Seeney said the government was keen to ensure a "level playing field" over port and water resource access.

"We can't change the geography as far as access to a port in the South of Embley, but we do believe there are large untapped volumes of water."

 “Our key objectives are to maximise the benefits and returns from the mine to the native titleholders and the Aurukun community and to maximise the financial returns to Queensland.”

The five companies in the running have until September to lodge their plans, with a decision regarding proponents set to be made before the end of the year.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.