Metro Mining delays Bauxite Hills expansion amid market uncertainties

The company said completion of stage two of the expansion was not expected to occur prior to the second half of 2021.

Located 95 kilometres north of Weipa on Western Cape York in Queensland, Bauxite Hills mine covers approximately 1,900 square kilometres and has an estimated ore reserve of 109.5 million tonnes and total resources of 138.2 million tonnes.

The stage two expansion was expected to take the mine’s annual production to 6 million tonnes per year by 2021.

Metro’s chairman Stephen Everett said detailed engineering and design work was completed and that contract negotiations with key suppliers were well advanced.

The company has also put the expansion financing in place, having secured a $47.5 million loan from the Northern Australia Infrastructure Facility (NAIF) to fund the construction and mobilisation of a floating terminal.

However, Everett said timing for the formal commitment to stage two at Bauxite Hills was being influenced by the uncertainty over the outlook for global growth and associated weakness in aluminium and alumina prices due to the impact of COVID-19.

“This short-term uncertainty is currently negatively impacting general confidence in the sector and customers’ preparedness to enter into offtake agreements.

“With funding now secured and key supply contracts negotiated, Metro will continue to monitor the market conditions prior to taking the decision to formally proceed,” Everett stated.

As a result, the company expects production next year to be between 4 to 5 million wet tonnes, rather than the previously predicted 6 million tonnes.

It comes amid a good start to 2020 production for Bauxite Hills, with excellent mining, haulage and shiploading rates reported for April.

Currently, there is 150,000 tonnes of run-of-mine (ROM) and screened stockpiles at the Port of Skardon River. Three vessels have already been loaded and have sailed.

The company recently added three 200-tonne capacity triple trailer sets to its fleet, upgraded its two screening plants to increase capacity from 550 tonnes per hour to 850 tonnes per hour each, and added 40 rooms to the Bauxite Hills camp – which is now sufficient for stage two production.