Metro drives Bauxite production through new deal with Aluminum Group

Metro Mining has signed a contract with state-owned Chinese company Aluminum Group to deliver 420,000 wet metric tonnes of bauxite in the second half of this year.

The contract is based on market pricing, with typical bonus and penalty clauses being associated with the agreed product specifications.

Aluminum, which owns Alumina Refineries, operate in the provinces of Shanxi, Shandong Guangxi and Guizhou. The bauxite will be delivered to the Shanxi refinery, which is currently operating below capacity due to reduced bauxite availability in the region.

The refinery is planning to modify its refining conditions at the plant to match the processing requirements of the material from Metro’s Bauxite Hills mine.

Metro has successfully sold approximately 90 per cent of its planned 2019 production of 3.3 to 3.5 million wet metric tonnes.

The contract complements Metro’s existing offtake agreements, including its foundation contract with aluminium producer Xinfa for the delivery of seven million tonnes over the period between 2018-2021.

Metro’s managing director Simon Finnis said he was excited to finalise the new off-take agreement with Aluminum Group, which the company believes has the capacity to be another long-term off-take partner.

“This agreement highlights the particular interest being seen from refineries located in the inland provinces where supply of domestic bauxite has been hindered by recent mine closures and environmental audits,” he said.

China has experienced decreased bauxite production due to the deteriorating quality of reserves and a government initiative to reduce pollution levels.

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