JUNIOR bauxite miner Bauxite Resources has taken a key first step toward establishing a downstream alumina processing industry in Western Australia after locking in a major Chinese partner.
BRL last Friday finalised a binding heads of agreement with China’s Yangkuang Corporation to undertake bankable feasibility studies into $1.5 billion bauxite mining and refinery development in the state’s South West.
Yangkuang, part of the same group, which has just acquired Felix Coal for $3.5 billion, will fund 75 per cent of the refinery development to earn a 50 per cent interest.
As a precursor, BRL must confirm bauxite resources of at least 150 million tonnes within its 10,000 square kilometre Darling Range tenements, a target managing director Dan Tenardi said should be achieved in the fourth quarter of this year.
That should allow detailed engineering to begin next year, followed by construction of an initial 800,000 tonnes per annum alumina refinery in 2012, he said.
Critically, Yangkuang was an innovative refinery developer that would make the planned refinery significantly more efficient than WA’s existing operations runs, he said.
“There’s been significant advancement made in China, and their refinery at Shandong ... is way ahead of what we have here,” Mr Tenardi said.
BRL has identified Kemerton as the most likely refinery location, giving it access to both BRL’s proposed Darling Range mine sites and the Bunbury port.
Furthermore, the joint venture agreement ultimately envisages the development of an aluminium smelter – a long-unrealised dream of successive state governments since the 1960s.
Smelter construction could potentially start within a couple of years of the refinery’s completion, Mr Tenardi said.
But given the huge power needs of refining and smelting alumina, BRL was watching Griffin Coal’s problems closely.
The refinery will initially consume around 2.5 million tonnes of bauxite annually, less then half of BRL’s planned mine output, enabling the remainder to be exported to China.
To that end, BRL last week exported the second 44,000t cargo of bauxite from its first pit in Chittering under a short-term trial to deliver 120,000t to China.
Mr Tenardi said he expected to secure the necessary approvals to boost output to 1.2mtpa in July, and then gradually expand to 6mtpa as new pits were brought on stream.
