CRU issued a report late last week detailing the future of bauxite ore, and, according to CRU’s analysts, the future looks pretty good. Following is an overview of the top bauxite-producing regions and an outlook for the coming months.
Indonesia – the archipelagic country had been the source for up to 70% of bauxite imports into the People’s Republic of China. However, a ban enacted in January 2014 sent China searching for a new outlet. Indonesia is attempting to mold its natural resource market into one more oriented towards value-added investment. According to CRU, the ban, which has already passed constitutional muster, is likely to remain in place. Ministerial regulations may change, however, and bauxite exports, while not likely, are still distinctly possible.
Malaysia – Indonesia’s northwestern neighbor picked up a great deal of slack in the bauxite market after the country’s bauxite ban, but it has been under its own self-imposed ban begun almost two years to the day after that of Indonesia. Analysts at CRU predict a resumption in bauxite mining, but with significantly fewer miners. News of such a restart might have rattled aluminium and associated markets in the past, but, as CRU points out, the bauxite market is a great deal more diversified than it was even a few years ago.
Guinea – one region that is part of that diversification is the West African republic of Guinea. Weiqiao Group announced plans to bring in 15 million metric tons of bauxite this year, but CRU expects the haul to be more in the neighborhood of 12 million metric tons. However, even at that lower tonnage, Guinea is now suddenly a major player in China’s bauxite supply for the present time. It will most likely figure into China’s future bauxite plans as well, with Weiqiao Group counting on the country’s estimated 7.4 billion metric tons in reserves to keep their refineries and smelters rolling. Weiqiao Group’s shipping partner Winning International Group has, according to CRU, allocated a significant portion of its fleet to Weiqiao’s operations in Guinea. So confident in Guinea’s future in the bauxite industry is CRU that it declares 2016 “the year of Guinea.”
Australia – There’s a bourgeoning bauxite industry bubbling along in Australia, but CRU counsels caution due to issues regarding ore quality and transportation costs. As has been reported in these pages, ABx’s Bald Hill Mine has finally come in, but the firm has had difficulty finding buyers for its ore. Overall, CRU expects Rio Tinto to remain the king of the bauxite hill Down Under, with Amrun ramping up to fill the vacuum of Weipa as the latter winds down.