The immediate future for bauxite remains promising. A boom period is considered imminent, driven by demand for China where a substantial fall in domestic reserves and production will require a corresponding increase in bauxite imports. In addition to Chinese domestic bauxite reserves being in decline, the average quality / grades of these reserves has been in decline since 2009.
China plans to build several new alumina refineries with the potential capacity of +9 million tonnes per annum by 2019, and, in the UAE, Indonesia and Laos there are plans to build new alumina refineries with a potential capacity of +6 million tonnes per annum, also by 2019.
Existing bauxite supplies together with planned developments are expected to satisfy global demands until approximately 2020. Beyond this point in time, new projects will be required to meet the forecast demand, with a supply deficit of more than 25 million tonnes by 2025, and over 50 million tonnes by 2030.
The majority of global demand is based on low temperature (trihydrate) bauxites, which currently represents 75% of Chinese imports. The key Shandong coastal province is 100% dependent on imported bauxite. The Company’s projects in the Solomon Islands are potentially well placed to supply high quality low temperature (trihydrate) bauxite to Asian markets.
The Company’s recent acquisition of the Darling Range Bauxite Project in Western Australia – which hosts a JORC 2004 inferred mineral Resource estimate of 89.3Mt @ 41.75% total Al2O3 (aluminium oxide) and 4.43% reactive (soluble) SiO2 (silicon dioxide), inclusive of nine main resource areas over a strike of approximately 75 kilometres – is consistent with the Company’s strategy of building high quality bauxite asset portfolio in targeted jurisdictions, and provides an exciting focus point for the Company’s domestic exploration activities.