Allison Britt (firstname.lastname@example.org)
Roy Towner (email@example.com)
Bauxite is the main raw material used in the commercial production of alumina (Al2O3) and aluminium metal globally, although some clays and other materials can be utilised to produce alumina. Bauxite is a heterogeneous, naturally occurring material of varying composition that is relatively rich in aluminium. The principal minerals in bauxite are gibbsite (Al2O3.3H2O), boehmite (Al2O3.H2O) and diaspore, which has the same composition as boehmite, but is denser and harder.
Australia is the world's largest producer of bauxite, representing 32% of global production in 2011. The bauxite resources at Weipa in Queensland (Qld) and Gove in the Northern Territory (NT) have average grades between 49 and 53% Al2O3 and are amongst the world's highest grade deposits. Other deposits are located in Western Australia (WA) in the Darling Range, the Mitchell Plateau and at Cape Bougainville, of which the latter two have not been developed. The bauxite mines in the Darling Range have the world's lowest grade bauxite ore mined on a commercial scale (around 27-30% Al2O3). Despite the low grade, the mines accounted for 23% of global alumina production.
Small deposits of bauxite also occur in New South Wales (NSW), with the largest in the Inverell region where 11 million tonnes (Mt) of low-grade ore has been identified. The richest bauxite deposit in NSW is at Sutton Forest where a small resource of 24 000 tonnes grades at 53.9% Al2O3. These deposits pale in comparison to the large deposits of many millions of tonnes such as Weipa in Qld with 3466 Mt and Gove in the NT with 216 Mt.
More than 85% of the bauxite mined globally is converted to alumina for the production of aluminium metal. An additional 10% goes to non-metal uses in various forms of specialty alumina, while the remainder is used for non-metallurgical bauxite applications. In most commercial operations, alumina is extracted (refined) from bauxite by a wet chemical caustic leach process known as the Bayer process. Alumina is smelted using the Hall-Heroult process to produce aluminium metal by electrolytic reduction in a molten bath of natural or synthetic cryolite (NaAlF6).
Australia's aluminium industry is a highly integrated sector of mining, refining, smelting and semi-fabrication centres and is of major economic importance nationally and globally. The industry is becoming less vertically integrated, however, owing to the rise of independent smelters, particularly in China.
The Australian industry consists of five long-term bauxite mines, seven alumina refineries, six primary aluminium smelters, 12 extrusion mills and two rolled product plants producing aluminium sheet, plate and foil. The industry in Australia is geared to serve world demand for alumina and aluminium with more than 80% of production exported. Transport, packaging, building and construction provide much of the demand for the metal in Australia.
The long-term future of Australia's aluminium industry is underpinned by vast resources of bauxite located adjacent to the Gulf of Carpentaria in northern Australia in the regions around Gove (NT) and Weipa (Qld) and in the Darling Range south of Perth (WA). Deposits in these regions rank among the world's largest identified resources in terms of extractable alumina content.
Bauxite deposits identified in the 1960s at the Mitchell Plateau and Cape Bougainville in northern WA are not currently economic to develop, but represent a potential future resource. The lack of large-scale infrastructure and commercial energy supply in the Kimberley region remains a significant hurdle to development of these resources. In addition, the Australian Heritage Council added the West Kimberley (which includes the Mitchell Plateau) to the National Heritage List in August 2011, which has the potential to influence future development proposals.
Economic Demonstrated Resources (EDR) of bauxite totalled 5665 Mt in 2011 (unchanged from 2010). Queensland holds 57%, WA 39% and the NT 4% of Australia's EDR of bauxite.
Australia's Subeconomic and Inferred Resources of bauxite totalled 2055 Mt (unchanged from 2010) and 1120 Mt (up from 950 Mt in 2010), respectively. The bulk of these resources occur in WA.
About 95% of bauxite EDR is currently accessible for mining. Some areas within mining leases in the Darling Range in WA are not available for extraction for environmental reasons. The ratio of Accessible Economic Demonstrated Resources (AEDR) to current mine production shows the resource life of existing bauxite operations is around 70 years. The potential exists for further mineral exploration and reserve delineation to extend the current resource life estimate, particularly in the vicinity of existing operations.
Approximately 33% of AEDR comprises Joint Ore Reserve Committee (JORC) Code ore reserves as reported by industry. The remainder represents resources assessed by Geoscience Australia as being economically recoverable from measured and indicated categories of mineral resources, as defined under the JORC Code and other classification systems used by companies not listed on the Australian Securities Exchange. The surface expression of bauxite and confidence in lateral continuity of thickness and grade make it possible in certain terrains to classify some Inferred Resources as EDR.
Specific data on exploration for bauxite are not available nationally. Because of the scale of existing known resources, much of the exploration effort for bauxite is directed at extending brownfields occurrences close to existing infrastructure.
There are smaller exploration projects, however, occurring away from the five big mines. Examples include Bauxite Resources Ltd and its joint venture partners, which are actively exploring in the Darling Range in WA. During 2011 and 2012, the company drilled a total of 7831 holes for 32 189 metres (m). Another company, Australian Bauxite Ltd, further explored the Binjour Plateau in Qld in 2012, drilling some 200 aircore holes and nine strategically placed diamond drill holes.
Australia was the leading producer of bauxite and alumina globally in 2011 and the fifth largest aluminium producer. Based on Australian Bureau of Agricultural and Resource Economics and Sciences data, production totalled 69.98 Mt (68 Mt in 2010) of bauxite (32% of global production), 18.73 Mt (20 Mt in 2010) of alumina (25% of global production), and 1.95 Mt (1.97 Mt in 2010) of aluminium (5% of global production).
As with other commodities, prices for aluminium reflected the economic volatility experienced as a result of the global financial crisis in 2008-09. After peaking during July 2008, fetching around US$3100/tonne, prices reached their lowest point of US$1300/tonne in late 2008. Prices during 2011 and 2012 ranged from a high of US$2600/tonne in June 2011 to a low of US$1800/tonne in August 2012.
The export value of each commodity for 2011 was bauxite $286 million ($205 million in 2010), alumina $5320 million ($5232 million in 2010) and aluminium $4100 million ($4172 million in 2010), leading to a total export value of $9706 million ($9608 million in 2010).
The economic significance of value adding or first-stage manufacturing to secure enhanced export value is demonstrated through the high values compared to lower volumes for alumina and especially aluminium, and the large volume and relatively small value for bauxite.
According to United States Geological Survey, world bauxite resources are estimated at 29 000 Mt. Australia's demonstrated bauxite resources of 5665 Mt rank second in the world after the Republic of Guinea (7400 Mt), and ahead of Brazil (3600 Mt), Vietnam (2100 Mt), Jamaica (2000 Mt) and India (900 Mt).
Gove (NT): The Gove bauxite mine and refinery on the western side of the Gulf of Carpentaria is operated by Pacific Aluminium, a subsidiary of Rio Tinto Ltd. Gove has bauxite resources of 216 Mt of which 170 Mt are JORC Code compliant reserves at 49.4% Al2O3. The Gove refinery processed 7.246 Mt of bauxite to produce 2.549 Mt of alumina in 2011, compared to 7.190 Mt of bauxite for 2.473 Mt of alumina in 2010.
In 2012, Rio Tinto raised concerns about the future of the Gove refinery as a result of high electricity costs caused by the reliance on diesel power generation and began negotiations with the Northern Territory Government for a long-term gas supply. Rio Tinto also proposed that the Federal Government underwrite the construction of a gas pipeline to the refinery. In November 2012, the Federal Government indicated its support for the construction of the pipeline and the NT Government announced on 11 February 2013 that it had negotiated a 10-year gas-supply deal for the Gove operation. Rio Tinto subsequently committed to keeping the alumina refinery operating.
Weipa (Qld): Weipa, on western Cape York Peninsula, has reserves of 1554 Mt of bauxite at an average grade of 52.8% Al2O3 plus additional resources of 1922 Mt at 51.3% Al2O3.
In July 2011, the Queensland Government released the Environmental Impact Statement (EIS) for the South of Embley project. The project will result in Rio Tinto extending its bauxite mining south of its current operations at Weipa, and constructing new infrastructure including a power station, processing plant and ship-loading facilities. The Queensland Coordinator General approved the project in May 2012 and in November 2012, Rio Tinto released its draft Commonwealth EIS for the South of Embley project. The project is expected to extend operations at Weipa by up to 40 years.
Binjour (Qld): In October 2011, Australian Bauxite Ltd announced a maiden resource for the Binjour deposit, 110 kilometres (km) southwest of Bundaberg, of 16.8 Mt at 44.2% Al2O3. In June 2012, the company increased the resources to a total of 24.5 Mt at 44.1% Al2O3. The Binjour bauxite unit is a distinct and predictable layer averaging 6 m thickness, but subject to contamination by silica gel in veinlets. The company claims the silica is easily removable by washing and is continuing to explore the deposit.
Aurukun (Qld): The Queensland Government currently holds the rights to the bauxite resource at Aurukun in Cape York. In November 2012, the state government announced that it was seeking expressions of interest for the development of the mine, stating that proponents must be able to demonstrate experience in developing and managing mines and associated infrastructure and have experience in working with indigenous communities and traditional owners. However, it is not a requirement that the developer establish a refinery at the site.
Other bauxite tenements in the Aurukun region were owned by Callabona Uranium Ltd, which sold its interests to McKay Brook Resources Pty Ltd in October 2011.
Pisolite Hills (Qld): In 2010, the Queensland Government's Wild Rivers Legislation led Cape Alumina Ltd to review and declare uneconomic its plans for the Pisolite Hills bauxite mine and port project, 50 km northeast of Weipa on Cape York. However, in October 2012, the newly elected Queensland Government declared the Pisolite Hills project to be a Significant Project. The company is completing the technical and environmental studies required for an Environmental Impact Statement and is consulting with traditional landowners. In 2008, the company had referred the project to the Commonwealth Government for assessment under the Environmental Protection and Biodiversity Conservation Act 1999 and it was determined to be a "controlled action".
The Pisolite Hills resource is estimated at 134.6 Mt of bauxite with the potential to yield up to 7 Mt per annum of dry-product bauxite over a 15 year mine life.
Bauxite Hills (Qld): Cape Alumina Ltd also has mine and port project located on western Cape York at Bauxite Hills, 95 km north of Weipa. In December 2012, the company completed a pre-feasibility study that confirmed the technical and economic feasibility of a mine producing 5 Mt per annum of bauxite over 10 years. Bauxite Hills has an Inferred Resource of 64 Mt. The company is focussing on the larger Pisolite Hills project but expects that there will eventually be significant synergies between the two projects, such as a shared beneficiation plant and other facilities.
Felicitas (WA): In June 2012, Bauxite Resources Ltd announced an initial resource for the Felicitas bauxite deposit in the Darling Range of WA totalling 73.3 Mt at 39.2% Al2O3. The bauxite horizon is between 2 and 16 m thick and additional drilling is planned with a view of adding to the resource base. The deposit is part of a joint venture between Bauxite Resources and Yankuang Group.
Cardea 3 (WA): In November 2011, Bauxite Resources Ltd announced that a mineral resource estimate was completed for the Cardea 3 bauxite deposit in the Darling Range. Total resources amount to 17.8 Mt at 41.2% Al2O3 and expansion drilling is planned. The deposit is subject to two separate joint ventures with HD Mining and Investment Pty Ltd (representing the Shandong Provincial Bureau of Geology and Mineral Resources) and Yankuang Group.
Ceres (WA): In July 2012, the HD Mining and Investments Ltd and Bauxite Resources Ltd joint venture announced an Inferred Resource of 15 Mt at 40.9% Al2O3 for the Ceres bauxite deposit near Williams in the Darling Range. The company regards this as an excellent result as it opens up the possibility of the Williams area becoming a new bauxite centre. Additional drilling is planned for the future.
Huntley and Willowdale (WA): Alcoa of Australia Ltd, which is the Australian operator for Alcoa Worldwide Alumina and Chemicals, the joint venture between Alumina Ltd and Alcoa Inc, operates two mines, Huntley and Willowdale, on its mining lease 75 km southeast of Perth in the Darling Range. Huntley, opened in 1976, is the world's largest bauxite mine. The annual mining rate at Huntley exceeds 23 Mt and the rate at Willowdale is approximately 10 Mt, with the mining lease valid until 2044. The mines supply bauxite to the Pinjarra and Kwinana alumina refineries.
Despite both Alcoa Inc and Alumina Ltd being publically listed companies on the Australian Stock Exchange and elsewhere, neither publishes resource figures.
Worsely (WA): The Worsley mine and refinery is located in the Darling Range and is operated as a joint venture between BHP Billiton Ltd, Japan Alumina Associates (Australia) Pty Ltd and Sojitz Alumina Pty Ltd. The mine has bauxite resources of 980 Mt. The refinery produced almost 3.4 million tonnes of alumina during the 2011-12 financial year.