BHP confirms Australian alumina refinery expansion

BHP Billiton has confirmed details of a US$1.9 billion expansion of its Worsley alumina refinery in Western Australia.

The project, which will raise annual capacity at the refinery to 4.6 million tonnes from the current 3.5 million tonnes, involves expanding mining operations and refinery capacity, and also upgrading port facilities.

BHP owns 86% in the Worsley refinery, with partners Japan Alumina Associates and Sojitz Alumina holding the balance.

The miner says the outlook for alumina is strong and the refinery is already one of the most efficient in the world.

However, some analysts are interpreting the move as connected to BHP’s designs Rio Tinto.

In 2007, Rio acquired Alcan of Canada and immediately became one of the world’s largest suppliers of aluminium.

While BHP is the world’s largest miner, it ranks only sixth in world aluminium production.

Rio now has plans to increase its output of alumina and bauxite and could possibly involve Russian and Chinese partners. This in itself could prove a stumbling block to a hostile takeover bid by BHP.