Queensland Premier Annastacia Palaszczuk and Rio Tinto CEO Jean-Sebastien Jacques visit visit Amrun mine development on Western Cape York Peninsula on Tuesday.
Queensland Premier Annastacia Palaszczuk and Rio Tinto CEO Jean-Sebastien Jacques visit visit Amrun mine development on Western Cape York Peninsula on Tuesday.

Rio Tinto mines local support

RIO Tinto is nearing the end a $2.6 billion spend on the Amrun bauxite mine near Weipa, just as the market appears to be going into oversupply.

Premier Annastacia Palaszczuk and Rio Tinto chief executive Jean-Sébastien Jacques yesterday toured the Amrun bauxite project which is expected to be producing and shipping by the end of the year and ramping up to full production next year.

The project has spent $2.1 billion with Australian companies and about $1.5 billion of that has been spent in Queensland with $244 million spent in far north Queensland.

More than 1200 people are now working on site including 900 Queenslanders representing 75 per cent of the workforce _ 178 are Aboriginal or Torres Strait Islander including 67 local Aboriginal people.

"Rio Tinto has set a benchmark in supporting our local and regional suppliers. This significant investment will build a strong foundation to ensure the sustainability of Western Cape communities for decades to come," Mr Jacques said.

Despite the benefit to local business global bauxite production has been increasing and is up by 7 per cent on last year. Guinea, one of the world's biggest bauxite produers, has been ramping up output to meet China's demand and will this year ship 44 million tonnes of the commodity to China.

Premier Palaszczuk said more than 770 Queensland businesses had been engaged directly and indirectly to supply goods and services at the Amrun project.

However, ConocoPhillips, a partner in the APLNG project, near Gladstone has told the Federal Government standing committee in industry innovation, science and resources said that a significant barrier to the greater use of local suppliers is "a reluctance to change the way they do business'' to meet the needs of resource companies.

The submission said it had successfully engaged with many local businesses and had spent $21 million on education, tranining and business capacity building.

"Small to medium enterprises in regional locations often struggled to justify investment in growth opportunities, or more specifically, are risk averse,'' the submission said.

"There is also an expectation that because a potential supplier is based locally they should be preferentially treated even when bids are uncompetitive or do not meet safety standards or system accreditation required for ConocoPhillips operations.''

Rio Tinto shares closed up 70¢ or almost 1 per cent at $73.48 yesterday.



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