Oct 14, 2019

Expansion plans for Cape York bauxite operation

Expansion plans for Cape York bauxite operation

Bauxite miner Metro Mining aims to step up annual production to 6 million WMT (wet metric tonnes) from 2021 with a $51.4 million expansion project.

The company today announced completion of the definitive feasibility study for the Stage 2 expansion of its Bauxite Hills operation, about 95km north of Weipa on Cape York Peninsula.

It comes as Bauxite Hills looks set to deliver 3.5 million WMT nameplate capacity from its second year of production and follows a record 500,000t production in September.

The mine exports bauxite via barges to bulk ore carriers through the Skardon River.

The largest component of the proposed expansion would be the construction and mobilisation to Skardon River of a shiploader or floating terminal at a cost of about $44 million.

The definitive feasibility study confirmed significant economic benefits in expanding to 6 million WMT. Metro said the final decision to proceed would follow finalisation of the funding package and completion of the detailed engineering and design work from Rocktree Consulting.

Clear reasons for 6Mt target

The expansion figure is the most feasible for both the 109Mt reserve and the operation, according to managing director Simon Finnis.

“6Mt is not a magic number,” Mr Finnis said. “It is a number we chose that is clearly achievable for our infrastructure.

“We see the biggest issue as the river. We don’t think it is a 20Mt river. We could do more. We have environmental approval to do 10. I am not sure this will ever be a 10Mt/year mine. 

“Mining resources get pretty skinny when you get to 10 and you’re a 10-year mine. Not that interested. You’ve got to accept that bigger and bigger and bigger is not always better. 

“Six gives us enough scale. If we were able to get that to six and a half, then we would do it. Unless we find another 100Mt you won’t see me advocate for a 15 or 20Mt mine.” 

The plan, which aims for a ramp up over the coming two years, rules out capital raising and is to be considered by the board soon.

As a 34-year mining veteran, Mr Finnis (above) entered into the Bauxite Hills lease with a track record of opening and operating mines in Australia and Africa.

That includes operations in the Northern Territory, Cobar, Broken Hill, Tasmania and West Africa.

Solid track record in mining

“I thought we were doing wonderful things there. We were changing the lives of 900 people, we were bringing new industry into Senegal. I was very proud of what we achieved there. We have a stable business,” he said. 

“Every mine I ever opened is still running today. That shows you that, one, they are sustainable to start with and, secondly, the structured program and operating set up is such that it stays open for a long time. 

“The one we opened in Broken Hill in 2006 is still operating today and I am very proud of that.”

Mr Finnis was interested to leave a legacy for the Cape York operation, which employs 39 per cent Indigenous staff out of a total of more than 200.

“I take great pride in that if we leave here in 20 years and you leave behind some of this infrastructure and there’s a tourism operation here or something else, I think that would be fabulous,” he said. 

“There’s no way you’d get someone else to put in the infrastructure for tourism or another venture unless the infrastructure was here. 

“I am not saying the end game is tourism, but what I am saying is that it would be really nice that in 40 years there was still something up there and it was a viable thing because of what we’ve done. 

“In the interim we’re going to make some money.”

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