Metro Mining is preparing to launch construction of the Bauxite Hills mine near Weipa in North Queensland in July.
Bauxite Hills, which will employ up to 200 people when developed, is on track to be in production and shipping ore by April 2018, according to the Brisbane-based company’s bankable feasibility study (BFS) for the project.
Metro has forecast the bauxite mine will cost $A35.8 million to build and it will generate $A2.5 billion in earnings over its 17-year mine life.
The company believes the BFS has confirmed that Bauxite Hills “will become one of the largest independent operations within the internationally-acclaimed Weipa bauxite region.”
The study also highlighted the benefits of Metro’s recent acquisition of the neighbouring Gulf Alumina project. For the combined Metro and Gulf prospects, the BFS delivered reserves of 92 million tonnes (Mt) and resources of 145Mt.
Metro has secured the necessary environmental approvals and mining leases to start early works on the Gulf part of the project. It expects to have the final environmental approval by mid year.
“Once approvals are finalised we plan to commence mining at two million tonnes per annum (Mtpa) increasing to 6Mtpa over the first four years,” Metro managing director Simon Finnis said.
“Whilst the BFS has been completed for steady state production of 6Mtpa, environmental approvals should allow production of up to 10Mtpa. We will continue to evaluate the benefits of increasing production as we move through the pre-development and operational phases.
“The BFS estimates life-of-mine revenue of $A5.7 billion and life-of-mine earnings before interest tax depreciation and amortisation (EBITDA) of $A2.5 billion.”
Finnis said the BFS confirmed Metro has a significant, long life, low capital cost and high margin bauxite project. Bauxite Hills already has basic infrastructure, including airstrip, haul roads, camp and port location.
Metro has locked in a binding offtake agreement with China’s Xinfa Group for 7Mt of bauxite over the first four years of mining.
The company has set a 30 per cent Indigenous target for its 200-person workforce.