Metro Mining has flagged “historically high” freight costs for shipping its bauxite product, which the company anticipates will negatively impact prices.
The company stated Chinese buying patterns, higher commodity prices, limited new vessel builds due to COVID-19 uncertainty and heavy port congestion have led to an ocean freight cost increase.
Metro has also anticipated bauxite demand should remain strong over the coming year.
Around 2.3 million wet metric tonnes will be sold to Chinese aluminium producer, Xinfa.
This agreement has allowed Metro to continue investing in the long-term development of the 3.5 million tonne per annum Bauxite Hills mine in Queensland.
According to the company’s quarterly report for March 2021, the second stage of expansion at the Queensland operation will be determined by economic conditions.
“Metro’s stage two expansion remains the core strategy for the long-term future of Bauxite Hills,” Metro stated.
“The largest component of stage two is the construction and mobilisation of a floating terminal to Skardon river which will facilitate faster loading of larger ocean-going vessels.”
Before any development takes place however, Metro has continued to focus on scheduled maintenance, mine planning and rehabilitation, following Bauxite Hills’ planned early wet season shut-down from September 2020.
The scheduled shutdown was completed in April and the mobilisation of 120 local employees will take place to accompany 130 additional contractors at the mine.
In late March, as the resumption of operations at Bauxite Hills took place, the company expected its maintenance activities to be well timed to take advantage of increased confidence in the market.
Metro Mining managing director and chief executive Simon Finnis said in March that Metro was always on the look out for avenues to growth.
“We have implemented several operational changes that will improve efficiencies, and will continue to focus on mining and shipping rates and lowering operational costs, as we are always looking for improvements in our systems and processes,” Finnis said.