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Construction has begun on the first bauxite mine in Tasmania in 30 years as the bauxite industry looks to take advantage of rising interest in the aluminum market.
Work has begun on Tasmania’s first bauxite mine in 30 years, bringing jobs to an industry looking to take advantage of growing interest in the aluminum market.
Bauxite, the third most abundant metal in the Earth’s crust, is the first stop in producing aluminum. Bauxite is refined to alumina, which through a smelting process is then turned into aluminum. Bauxite is usually strip mined, as it’s normally found near the surface of the terrain. Australia produces 23 percent of the world’s bauxite.
Australian Bauxite (ASX:ABX) has begun construction on its Bald Hill project, which will create about 45 direct jobs and a further 135 indirect jobs in the local economy. Australian Bauxite conducted exploration on the property in 2010 and has since moved to have those initial exploration licences turned into a full-fledged project. The company expects 1.6 million tonnes of bauxite to be mined from the three pits that make up the property.
“The opening of the Bald Hill mine will not only generate welcome economic activity but showcases the mineral diversity and potential of Tasmania,” Paul Harris, the country’s minister for resources, is quoted as saying by Australian Mining.
The news coincides with the announcement of an inferred mineral resource estimate for the Toubal bauxite deposit in Guinea, West Africa. Anglo-African Minerals (ETR:AMQ), which owns the property through subsidiaries Tougue Bauxite and Alumina, said the estimate came in at 722 million tonnes averaging 42.6 percent total alumina and 3.7 percent total silica.
“[W]e are further encouraged by the fact that the very limited confirmatory exploration is required in order to upgrade the Mineral Resource into higher confidence categories, potentially in the Measured and Indicated categories,” said James Lumley, CEO of Anglo-African, in a statement. “This Project represents a large resource base in a location that is likely to benefit strongly from third-party infrastructure developments in the country.”
An estimated deficit in aluminum supplies could trigger a rush in demand which would in turn increase the price of bauxite. Due to China’s need for aluminum — it leads the world in demand and consumption — combined with falling production in North and South America, a hole in supply is expected. Wang Chunhui, an analyst with Shanghai Metals Market, has predicted a price range of $1,850 to $2,150 per tonne throughout the year.
Securities Disclosure: I, Nick Wells, hold no direct investment in any of the companies mentioned in this article.
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