Rio Tinto announced this week that the Illawarra-based steelmaker would share in contracts for the Amrun Bauxite project in far north Queensland, worth $160 million.

The two contracts, awarded to Australian heavy engineering company Civmec, are for the construction of a process facility and for the part-supply of equipment. 

About 6200 tonnes of steel will be used in both projects.

The product will be sourced from the Whyalla and Port Kembla steel mills, before being fabricated at Civmec’s facilities in Perth and Newcastle. 

Despite being good news for BlueScope, it is understood the majority of steel needed for the projects – such as reinforcing bar –  would come from Arrium’s Whyalla steelworks.

The required 6200 tonnes of steel equates to less than a day’s production at the Port Kembla steelworks, where on average just over 7000 tonnes is produced daily.

The Amrun project – worth $2.6 billion – includes a greenfield bauxite mine, along with processing and port facilities on the Cape York Peninsula. 

The first bauxite is expected to be shipped in the first half of 2019.

Parliamentary secretary for the Illawarra Gareth Ward said Rio Tinto’s announcement was “terrific news” for BlueScope and the wider Illawarra. 

“BlueScope can end 2016 on this very high note after positive results from its last financial report earlier in the year,” Mr Ward said.

“This is yet another vindication of my push for the NSW government to defer payroll tax for this important and major Illawarra business.”

Rio Tinto’s growth and innovation group executive, Stephen McIntosh, said the project was “a great example of the way Rio Tinto partners with local suppliers to deliver local jobs and economic benefits for the nation”.