Brisbane’s Metro Mining Ltd announced yesterday the execution of a non-binding letter of intent (LOI) to deliver between 500 thousand to one million metric tons per year to the People’s Republic of China’s Shandong Aluminium Company Limited (Lubei) for at least three years.
The LOI contemplates Metro Mining commencing the delivery in April of next year when mining operations begin at the firm’s Bauxite Hills mine. Metro says the LOI provides for a continued and immediate framework for the parties to come to terms on a long-term, binding Offtake Agreement in the near future.
Lubei, which is China’s fifth-largest importer of bauxite, turns out approximately one million metric tons of alumina each year at its plant near Wudi in the northeastern province of Shandong. The agreement in question will fill up to forty percent of the company’s total yearly bauxite imports of 2.5 million metric tons.
“While it is a non-binding agreement, this LOI shows the strong appetite for our bauxite in the Chinese refining market,” opined Metro’s Managing Director Simon Finnis.
“We are committed to proceed to a binding agreement as quickly as possible, and are extremely pleased to have attracted another strong counterparty in Lubei,” he went on.
“The proposed Lubei supply is in addition to the binding 7 million tonne, 4 year Offtake agreement signed with Xinfa in 2016 and, once completed, will put Metro in a very strong sales position for the ramp up phase of the Bauxite Hills Mine,” Finnis 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. Construction at the mine is scheduled to begin in June, with first production on pace to occur in April of next year.