MELBOURNE, Nov 27 (Reuters) - Rio Tinto RIO.AX RIO.L gave the go-ahead on Friday to expand its bauxite output in northern Australia with a $1.9 billion project, approving a major mine at a time when most miners worldwide are slashing spending.
The Amrun project in Queensland state will initially produce 22.8 million tonnes of bauxite a year, replacing output from Rio's East Weipa mine, as the company aims to meet soaring demand from Chinese aluminium makers.
With mining costs in the lowest quartile for bauxite mines worldwide, Rio said it planned to eventually expand production at Amrun, previously called South of Embley, to produce 50 million tonnes a year.
"Amrun is one of the highest quality bauxite projects in the world," Chief Executive Sam Walsh said in a statement.
"This long-life, low-cost, expandable asset offers a wide variety of development options and pathways over the coming decades," he said.