Aluminum Corp. of China (Chalco) announced on July 1, 2010, it had agreed with the Queensland state government to terminate a development agreement dating from March 2007 for development of the Aurukun bauxite deposits on the Cape York peninsula and an alumina refinery near Bowen, Queensland. The agreement was allowed to terminate automatically after its June 30, 2010, expiration date. Chalco cited adverse changes in the aluminum industry since the signing of the agreement, including lower aluminum prices, rising project development and labor costs, and other unfavorable factors, as reasons for the termination. Costs to develop the project have been estimated at A $3 billion.

News reports indicated Chalco had approached the state government regarding the possibility of taking the alumina refinery out of the development scenario but that the government would not give ground on that issue. Reports also indicated that Chalco has spent about A$100 million on feasibility studies for the project.

Chalco and the Queensland government said they would continue discussions regarding development and investment options with respect to the Aurukun resources.

The government also has the option of tendering the resources for bids from other potential developers.

| More...