ABx suspends bauxite production to conserve cash

PERTH (miningweekly.com) – Bauxite miner Australian Bauxite (ABx) would temporarily suspend production and haulage from its Bauld Hill project, in Tasmania, starting the end of this week, in an effort to conserve cash.

In December, ABx delayed the first shipment from the Bald Hill mine, owing to a decline in bauxite prices.

The miner said on Thursday that following the suspension of production and haulage, routine rehabilitation and small tonnage sales would continue, and once the sale of the maiden shipment was achieved, the mine would immediately restart full-scale production and haulage of the second cargo of bauxite.

The Bald Hill mine entered production in December 2014. ABx had initially targeted a production of 440 000 t in 2016, which would rise to two-million tonnes a year by 2017/18.

ABx and its marketing partner were currently in negotiations with potential bauxite customers in China, India, the Middle East and Australia.

However, the company noted that negotiations in China had been frustrated by the large inventories of cheap Malaysian bauxite that had been accumulated by the Chinese refineries over the past five months.

While the company had welcomed news of a three-month suspension of bauxite shipments from Malaysia, from January 15 onward, it added that uncertainty over future tonnage from Malaysia still remained a confusing issue in the Chinese bauxite markets.

Malaysia's bauxite mining industry has boomed in the past two years. Between January and November 2015, the country exported about 20-million tonnes of bauxite to China, which is an increase of about 700% from a year earlier. In 2013, Malaysia shipped 162 000 t.

The country has been filling a supply gap left after Indonesia banned bauxite exports in early 2014.