Australia’s Metro Mining Ltd. announced yesterday the negotiation of two new offtake agreements covering the lion’s share of the firm’s expected production through 2019.
Per the firm, the sales agreements are with an unnamed Chinese buyer with an end destination of Henan Province. The agreement will have Metro shipping 90 percent of its planned production this year to the Chinese buyer in question, which is a total of roughly 580 thousand metric tons, which leaves another 200 thousand metric tons required for delivery by the end of next year.
Metro advised shareholders that talks are ongoing for the sale of the remaining output that is yet to be claimed. Shipments to Xinfa and three other customers under an earlier deal have already been made, according to the firm.
Price terms were not disclosed by the company yesterday, but the release indicated that pricing was generally based on the market, with the usual bonuses and penalties associated with bauxite contracts.
Metro Mining’s managing director Simon Finnis haled the agreement as a tremendous positive for the continued growth and success of his company.
“These agreements are particularly pleasing as 2018 is now largely covered to a number of different customers, and we’ve started to sell material for next year. It demonstrates the strong demand for our bauxite in the Chinese market and supports our growth and marketing strategy. The mine continues to perform well with all commissioning issues well and truly behind us, and production continuing to increase month on month.”
Though other factors are likely in play, Metro notes that the rise in Chinese demand is largely attributable to recent bauxite mine closures in Henan Province.
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.