Brisbane’s Metro Mining Ltd announced yesterday that it has papered an agreement with the People’s Republic of China’s Xinfa Group.
According to Metro, the agreement is for four years and obliges the firm to provide one million metric tons in the contract’s first year, then two million metric tons per annum for the remaining three years, but allows for a ten-percent variance in production. Pricing will be based upon an agreed-upon percentage of an alumina index (which was not specified in the press release) and on the bauxite’s quality. Payment is to be made by way of irrevocable Letter of Credit, and may be varied on account of the bauxite’s quality.
The agreement will ultimately account for fully half of Metro’s annual production. The firm says this will guarantee sales for an important time in the operation, and helping to provide stability as the firm seeks financing. They also believe it represents an endorsement of their bauxite’s quality and demonstrates the confidence Xinfa has in Metro as it prepares for production.
“This agreement shows the strong relationship and exceptional good faith between Xinfa and Metro Mining,” Metro CEO Simon Finnis said. “We look forward to continuing to work closely with Xinfa as we further define the project development plans. The first shipment of bauxite is expected in 2018.”
“Our focus is now on completion of the Definitive Feasibility Study (DFS), achieving permitting approvals and undertaking pre-development work,” he concluded.
Metro Mining is based in Brisbane, and began life when it was spun off from Cape Alumina Ltd. upon its takeover by MetroCoal Ltd in 2014. The firm has exploration rights in over 500 square miles of western Cape York, which is second to only Rio Tinto Alcan. Its primary asset is its Bauxite Hills Project, which is expected to yield up to four million metric tons per annum.