Australian Bauxite (ABx) announced on Thursday that it would suspend operations in the state of Tasmania after having failed to secure a buyer for its initial 40,000-metric-ton bauxite shipment. ABx said it would work to save cash until a sale could be completed, and that closing operations at its project in Campbell Town would be one of those measures.
ABx elaborated thusly in its press release:
Negotiations in China have been frustrated by the large inventories of cheap Malaysian bauxite that have been accumulated by the Chinese refineries over the past 5 months and, over the last fortnight, the nearness to Chinese New Year in February. ABx welcomes the recently announced 3 month suspension of bauxite shipments from Malaysia from 15 January onwards but uncertainty about future tonnages to be sold out of Malaysia still remain a confusing issue in the Chinese bauxite markets.
The People’s Republic of China is the world’s top producer of aluminium, and it has kicked production into high gear since Indonesia banned bauxite exports almost exactly two years ago.
Although operations in Tasmania were suspended, ABx’s other projects will continue:
Routine rehabilitation and small tonnage sales of bauxite ex-mine will continue and once a sale of ABx’s maiden shipment is achieved, the mine can immediately recommence full-scale production and haulage of the second cargo of bauxite to Bell Bay Port can occur without delay.
ABx claimed initially that bauxite shipments from Tasmania were delayed on account of a drop in bauxite prices due to Malaysia’s increased output of same prior to that country’s rainy season, and that the drop in price meant that storage space for bauxite was not available. Prior to that, ABx said in January 2015 that the shipment, which was initially slated to be shipped in the following May or June, was delayed because of problems in obtaining the necessary shipping permits.