ASX-listed Australian Bauxite Limited (ABX) has recently notified that the company’s Board of Directors have approved the lodgement of a mining lease application for Binjour Bauxite Project in early 2020, which will commence with pre-lodgement discussions with government departments as early as possible.
Before giving an approval, the company (Abx) and its marketing partner - Rawmin Mining of India reviewed financial assessments, project plans, risk-factors and bauxite market developments for over three days.
The approval was given following positive bulk-sampling results in November that confirmed that the Binjour Project can achieve the required bauxite specifications and operate at a bulk-scale mining and screening scale.
Binjour Project is the company’s flagship project, located 115kms to the southwest of Bundaberg export port in central Queensland with bauxite resources totalling 37Mt. ABx considers the project to be a reliable source of gibbsite-rich bauxite in Queensland, ideal for low-temperature alumina refineries being low silica, high grade and carbon-free.
Binjour Project – Fully Funded by Rawmin Mining of India
The Binjour Project is fully funded by Rawmin Mining of India, with which the company intends to sell 0.5 - 1.5Mt per year of gibbsite-rich trihydrate (THA) bauxite grading 5 per cent SiO2 and 44 to 45 per cent Al2O3, suitable for refining into alumina by low-temperature Bayer-process refineries.
A tripartite sales MoU exists between the company, Rawmin Mining and a Chinese aluminium producer Tianshan for the sale of 0.5 to 1.5Mt of bauxite from the project and a similar tonnage from Rawmin’s bauxite mines in India to Tianshan’s new low temperature alumina refinery in southern China, that needs large supplies of the Binjour-type of bauxite starting end 2020.
The company informed that it will be the project operator, and Rawmin Mining will be entitled to a 50 per cent JV interest in the project. Rawmin Mining has agreed to fund working capital and all pre-production costs for the project.
Nine Years' Hard Work Set to Yield Results
To develop an optimum strategy for the project, ABx has worked with port authorities, local & state government, landholders, market specialists, operator & logistics contractors and customers since 2010-11 when the discovery of the Binjour Bauxite deposit was made.
The company expects to produce metallurgical-grade high-quality bauxite from the project, exported from the Port of Bundaberg in huge bulk carrier ships. The port is sand-bottomed from the point of loading through to international shipping lanes and is situated well to the south of the Great Barrier Reef Park.
The company has an MoU (Memorandum of Understanding) with the Port of Bundaberg to explore the prospect to export bauxite in mass tonnages via the port. Under the agreement, the company aims to investigate a specific potential stockpile site and consider its potential for:
- Blending the bauxite to the contracted specification;
- Stockpiling bauxite at the “MoU Block”; and
- Transhipping bauxite for loading 150,000 tonne bulk carrier ships within port boundaries to compensate for high road haulage costs.
ABx Tapping Opportunities in Seaborne Markets
ABx has noted that the mining industry in India faces an uncertain future and is experiencing negative growth due to global competition and regulatory constraints.
There has been a sudden collapse in Indian bauxite exports from 9Mt in 2015-16 to only 0.1Mt in 2018-19, primarily due to a 15 per cent export duty levied in addition to already high royalty rates. Moreover, the bauxite production has also fallen from 28Mt in 2015-16 to almost 19Mt in 2018-19.
Excluding a change of regulations in India, Binjour bauxite holds the potential to be sold into the large and growing industry of bauxite refining and aluminium production.
In addition, the market dynamics also favour Binjour’s entry into seaborne markets, which will produce a product of an assured quality, with the below mentioned specifications:
Also, the current market prices for similar supplies of quality-assured seaborne gibbsite bauxite from Guinea and Ghana in West Africa and from Brazil all surpass USD 55 per tonne CIF China, offering a considerable market opportunity to ABx.
ABx is well positioned to tap this lucrative market opportunity via its Binjour project. For the first ten to fifteen years, the initial production from the project will focus on high-quality zones that need little processing. The company’s 2020 research is targeted at reviewing extraction of very high-quality bauxite from “detrital bauxite” rubble that has shed off the Binjour Plateau to form additional high-value products.
The company’s stock closed the trading session at $0.120 on 18th December 2019.
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