Apr 30, 2020

Bauxite expansion delayed as COVID-19 bites

Bauxite expansion delayed as COVID-19 bites

Metro Mining expects to put back its planned $51.4 million Bauxite Hills expansion due to uncertainty sparked by the COVID-19 crisis.

Completion of Stage 2 and the associated expanded production was not expected to occur prior the second half of 2021, Metro said.

The Stage 2 expansion, taking the Cape York operation to 6 million WMT (Wet Metric Tonnes) per annum, has attracted a NAIF offer of a loan facility of up to $47.5 million.

In an update this week, Metro said work had been completed on the detailed engineering and design work, and that contractual negotiations were well advanced with key suppliers.

However the company said timing for the formal commitment to Stage 2 at Bauxite Hills was being influenced by the uncertainty over the outlook for global growth and associated weakness in aluminium and alumina prices due to the impact of COVID-19.

“This short-term uncertainty is currently negatively impacting general confidence in the sector and customers’ preparedness to enter into offtake agreements. With funding now secured and key supply contracts negotiated, Metro will continue to monitor the market conditions prior to taking the decision to formally proceed,” the company update stated.

Production next year would therefore likely be 4-5 WMT, depending on the precise timing of commitment to Stage 2, the company said.

It comes amid a good start to 2020 production for Bauxite Hills, with excellent mining, haulage and shiploading rates reported for April.

Currently, there is 150,000 WMT of ROM and screened stockpiles at the Port of Skardon River. Three vessels have already been loaded and have sailed.

The company recently added three 200-tonne capacity triple trailer sets to its fleet, upgraded its two screening plants to increase capacity from 550 tph to 850 tph each, and added 40 rooms to the Bauxite Hills camp – which is now sufficient for Stage 2 production.