Perth-based exploration company United Minerals Corporation Ltd has reached a memorandum of understanding with Norwegian aluminium producer Norsk Hydro to assess development of a $4-5 billion bauxite mine and alumina refinery in the Kimberley region.
Perth-based exploration company United Minerals Corporation Ltd has reached a memorandum of understanding with Norwegian aluminium producer Norsk Hydro to form a joint venture to assess development of a $4-5 billion bauxite mine and alumina refinery in the Kimberley region.
The proposed project would be based on bauxite deposits in the remote Mitchell Plateau, locted north west of Wyndham.
UMC said the potential for an integrated bauxite mine and aluminium refinery was heavily driven by the expected development of gas projects in the Browse Basin, off the Kimberley coast.
These projects include Woodside's Browse project and Japanese company Inpex's Ichthys project.
"The joint venture will endeavour to take advantage of this historic availability of major energy sources in the Kimberley for the first time," the company said.
A UMC announcement is pasted below:
MOU SIGNED WITH NORSK HYDRO (A FORTUNE 500 COMPANY) FOR A POTENTIAL BAUXITE MINE AND ALUMINA REFINERY
The Directors of United Minerals Corporation NL (UMC) advise that a Memorandum of Understanding (MOU) has been reached with Norsk Hydro's ("Hydro") subsidiary, Hydro Aluminium AS ("Hydro Aluminium") to form a joint venture. Norsk Hydro is a Fortune 500
Company with market capitalisation of approximately US$41 billion. It is one of the world's largest integrated aluminium producers and is owned 43% by the Norwegian Government.
Hydro Aluminium has established an excellent record in Australia's aluminium industry through its smelter operations in the Hunter region of New South Wales, where it wholly owns and operates the 170,000tpa aluminium smelter at Kurri Kurri and is a joint venture partner in the Tomago smelter.
The purpose of the joint venture will be to develop an integrated bauxite mine and alumina refinery in the Kimberley region of Western Australia. The cost of such an initiative is estimated in the order of A$4 5 billion including associated infrastructure. Success will depend on achieving a large and reliable supply of bauxite at an acceptable grade and an equally large and reliable supply of gas at commercially viable prices.
For the last 12 months, UMC's 100% subsidiary Bauxite Australia Pty Limited, has been exploring in areas adjacent to the Mitchell Plateau bauxite deposits. A year 1 drilling program commencing in 2006 made a successful start in identifying extensive bauxite mineralisation on the Company's leases.
The potential for a substantial integrated bauxite mine and alumina refinery is heavily driven by forthcoming developments of gas projects which have been announced for the Browse Basin off the Kimberley coast. The WA Government has created the policy framework to ensure that sufficient reserves of gas from these projects are dedicated to onshore domestic use. The joint venture will endeavour to take advantage of this historic availability of major energy sources in the Kimberley for the first time.
The joint venture is subject to completion of satisfactory due diligence and formal documentation. Hydro will hold 75% of the joint venture and UMC 25%. Once bauxite and energy requirements are generally satisfied, Hydro will contribute 100% of feasibility expenditure with respect to the alumina refinery through to the conclusion of a bankable feasibility study (BFS). UMC will have
the opportunity to participate in the project up to its 25% share.
