Rio, Alcoa get more time on Mitchell Plateau

The WA Government has quietly given mining giants Rio Tinto and Alcoa a further two years to come up with a development plan for their Mitchell Plateau bauxite project in the Kimberley.

The latest extension secures Rio and Alcoa's grip on the massive bauxite deposit, 115km south-west of Kalumburu and surrounded by national parks, until the end of next year.

But it is also likely to infuriate environmental groups, like the Wilderness Society, which is campaigning against any development in the Kimberley.

The WA Government would not comment on the extension, which was confirmed by Rio last night.

"We have had an extension from the Government and it goes to December 31, 2012," a Rio spokesman said.

Despite the latest extension, it is understood that neither Rio (65 per cent) nor Alcoa (35 per cent) believes the project is viable in its present form, despite a recovering aluminium price.

The miners' agreement with the Government is subject to the Alumina Refinery (Mitchell Plateau) Agreement Act 1971, which grants the right to develop the bauxite reserves as long as they build an alumina refinery in the region.

But the isolation of the deposit - there is no existing infrastructure for a world-scale bauxite mine and alumina refinery operation, which requires huge volumes of water and electricity - as well as an inevitable battle with environmentalists desperate to protect the pristine Kimberley remain major impediments to the plan.

One mining industry insider said the environmental battle for a Mitchell Plateau development would completely overshadow the campaign against construction of Woodside Petroleum's Browse LNG processing plant at James Price Point, north of Broome.