Alcoa in bauxite export deal

Alcoa World Alumina Corporation has locked in a contract to directly export 400,000 tonnes of bauxite from the Huntly mine in Western Australia, as the company continues a move towards shipping of the commodity in unprocessed form.

The deal has been signed with a Chinese company, and is part of a larger series of $US126 million of deals for 2.2 million tonnes of sales to China, including shipments from two mines in Brazil, Alcoa said.

The Western Australian government has approved shipments of up to 2.5 million tonnes per annum for five years.

AWAC is 60 per cent owned by NYSE-listed Alcoa Corporation and 40 per cent owned by ASX-listed Alumina of Australia.

Local subsidiary Alcoa of Australia employs around 3,800 people in WA, at it’s three bauxite mines and three refineries which process the rock into alumina.

That is then shipped to smelters which turn it into aluminium, used in a variety of products from cans to aircraft.

There has been debate about AWAC moving away from refining in Australia in recent weeks, with state and federal ministerial representatives reportedly heading to New York to discuss the future of the Portland smelter in Victoria. 

The company has said it has enough bauxite at its deposits in WA to supply both raw exports and processing simultaneously.

In July last year, Alcoa of Australia sent its first batch of unrefined WA bauxite overseas for processing in a trial shipment.

This year in April, AWAC inked a deal to export $AU350 million of bauxite from mines in Brazil and Guinea as it moved into the raw bauxite market.

Perth-based Alcoa Bauxite president Garret Dixon said the new contract would open a further income stream for the company.

“This Western Australian contract comes just months after our first trial bauxite shipment from WA to China in mid-2016, which successfully introduced our WA product to the global market,” Mr Dixon said.

”Bauxite exports have the potential to generate greater value from our WA mineral lease, creating additional revenue streams for Alcoa and the State of Western Australia, while maintaining supply to our three WA refineries.”