Bauxite is the main raw material used in the commercial production of alumina (Al2O3) and aluminium metal, 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 30% of global production in 2012. The large bauxite resources at Weipa with more than 3000 million tonnes (Mt) in Queensland (Qld) and Gove (>200 Mt) in the Northern Territory (NT) have average grades between 49 and 53% Al2O3 and are amongst the world's highest grade deposits. Other large deposits (each >500 Mt) 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 mined on a commercial scale (around 27-30% Al2O3). Despite the low grade, the mines accounted for 23% of global alumina production as they also have low reactive silica, making the bauxite relatively easy to refine. Bauxite resources also occur in New South Wales (NSW) and Tasmania (Tas) but these are small (<25 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 energy-intensive 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, largely because of the rise of independent smelters, particularly in China.
In 2012, the Australian industry consisted of:
- Five long-term bauxite mines at Weipa; Gove; Huntly, Boddington and Willowdale (Figure 1);
- Seven alumina refineries at Gove, Yarwun; QAL, Kwinana, Pinjarra; Wagerup and Worsley (Figure 1);
- Five primary aluminium smelters (previously six before the 2012 closure of Kurri Kurri, NSW) at Bell Bay, Boyne Island, Tomago, Portland and Point Henry (Figure 1);
- Twelve extrusion mills located in NSW, Victoria, South Australia, Qld and WA; and
- Two rolled product plants producing aluminium sheet, plate and foil in Victoria.
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.
Economic Demonstrated Resources (EDR) of bauxite were 6281 Mt at December 2012 (Table 1), up from 5665 Mt in 2011. Queensland holds 61% of EDR, WA 35% and the Northern Territory 4%.
Australia's subeconomic resources of bauxite totalled 1573 Mt, down from 2055 Mt in 2011, and Inferred Resources totalled 1474 Mt (Table 1), up from 1120 Mt in 2011.
Table 1: Austrlalia's resources of bauxite and world figures as at December 2012
(% of Accessible EDR)
|EDR||Paramarginal||Submarginal||Inferred||Accessible EDR||Mine Production||World Economic Resources||World Mine Production|
|Bauxite||Mt||2145 (34%)||6281||144||1429||1474||6281||76.3||28 000||263|
Figure 2 shows that prior to 1988 bauxite EDR was around 3000 Mt and then rapidly increased in 1989 with the delineation of additional resources on Cape York Peninsula in Qld ('a' in Figure 2). In 1992, bauxite EDR decreased as a result of the reclassification of some resources on Cape York Peninsula to comply with requirements of the Joint Ore Reserve Committee (JORC) Code ('b' in Figure 2). Since 1992, Australia's bauxite EDR has steadily increased and in recent years has remained steady at around 6000 Mt.
Accessible Economic Demonstrated Resources
About 95% of Australia's EDR of bauxite is accessible for mining. Some areas within Darling Range mining leases in WA are not available for environmental reasons.
By end of December 2012, JORC Code Reserves in the Proved and Probable Reserve categories comprised 2145 Mt of bauxite, accounting for approximately one third of accessible EDR with the remainder defined as Measured and Indicated Resources. These proportions are almost unchanged from 2011.
Data on exploration expenditure for bauxite are not available in published statistics. The bulk of drilling is associated with brownfield occurrences close to existing infrastructure. However, smaller exploration projects away from the big five mines are scattered through the Darling Range in WA and along the east coast of Australia.
Australian Bauxite Limited has exploration projects in Qld, NSW and Tas with the bulk of recent efforts directed towards the Tasmania Project where the company continued its drilling program in 2013, with particular focus on mine boundary definition and the identification of new targets.
On the west coast, Bauxite Australia Limited upgraded its Fortuna deposit in WA with an exploration program comprised of 302 vertical holes totalling 2857 metres across an area of approximately 385 hectares on a nominal 160 x 80 metre drill pattern. The company completed an additional 220 vacuum drill holes at Fortuna in June and July 2013. It also scheduled a drilling program for its Felicitas deposit comprising 6029 holes for a total of 28 662 metres. The program covered some 3300 hectares on an 80 x 80 metre spacing and two upgraded resources were announced in May 2013.
In Qld, Gulf Alumina Limited further explored the Skardon River deposit with a drilling program in late 2012 comprising 128 holes for a total of 484 metres. About 111 holes were drilled through bauxite into clays and 1602 samples were screened and assayed with an upgraded resource announced in March 2013.
Australia was the leading producer of bauxite (Table 2) globally in 2012, the second largest producer of alumina and the fifth largest producer of aluminium. Indonesia was the largest exporter of bauxite because the majority of Australian bauxite is processed within Australia to alumina and aluminium.
Table 2: World production for bauxite.
|Rank||Country||Bauxite (Mt)||Percentage of world total|
Source: United States Geological Survey and the Bureau of Resources and Energy Economics; Percentages are rounded so might not add up to 100% exactly.
Based on data from the Bureau of Resources and Energy Economics, bauxite production totalled 76.281 Mt in 2012 (up from 70.231 Mt in 2011; Figure 3), alumina production totalled 21.357 Mt (up from 19.399 Mt in 2011; Figure 4) and aluminium production totalled 1.864 Mt (down from 1.95 Mt in 2011; Figure 5). The closure of the Kurri Kurri smelter in NSW in 2012 removed around 180 000 tonnes of aluminium from Australia's production capacity.
In 2012, 18.271 Mt of alumina was exported for a value of $5.152 billion. The average price was $282.0/tonne which was significantly lower than the 2011 price of $332.9/tonne.
As well as primary production, aluminium primary consumption and exports also declined in 2012 (Figure 5). In 2012, Australia consumed 233 216 tonnes of aluminium (down from 276 309 tonnes in 2011), and exported 1650 kilotonnes (down from 1681 kilotonnes in 2011) for a value of $3.460 billion (down from $4.099 billion in 2011). Like alumina, the average price of aluminium declined significantly in 2012 to $2097.5/tonne from the 2011 average price of $2439.0/tonne.
World bauxite resources are estimated at approximately 28 280 Mt with Australia holding the second highest amount after Guinea (Table 3). Brazil, Vietnam and Jamaica also hold significant resources (more than 2000 Mt) with Indonesia, India, Guyana, China and Greece making up the remainder of the top 10 countries.
Table 3: World economic resources for bauxite.
|Rank||Country||Bauxite (Mt)||Percentage of world total|
Source: United States Geological Survey and Geoscience Australia; Figures are rounded to nearest ten million tonnes; Percentages are rounded so might not add up to 100% exactly.
The bauxite market appears to be undergoing structural change. Traditionally, Australia has had an integrated bauxite-alumina-aluminium industry but the rise of Chinese alumina refineries and aluminium smelters, along with industry changes in Indonesia, has created new market opportunities for direct export of the raw commodity.
Indonesia is the largest exporter of bauxite in the world but it is moving towards its own integrated bauxite-alumina-aluminium industry, including the construction of new alumina refineries to supply the growing aluminium smelter industry. In May 2012, the Indonesian Government implemented export quotas and a 20% export tax on raw commodities, including bauxite. In January 2014, the tax rate on commodity exports rose to 50% along with a further reduction in export quotas. Indonesian bauxite is usually sold to Chinese low-temperature refineries and, with the potential reduction in supply, Australian and African bauxite producers (and emerging producers) are expected to fill any shortfall along with supplying new capacity.
While the market for bauxite is looking positive, the Australian alumina market is undergoing significant changes. The Gove alumina refinery in the NT is facing a bleak future. Rio Tinto announced in November 2013 its intention to close the refinery, reducing Australia's alumina capacity by up to 3.8 Mt per annum (Mtpa). The company will continue to operate the bauxite mine.
This loss of alumina capacity is partly offset by increases in alumina production at the Yarwun (Qld) and Worsley (WA) refineries. Stage 2 of Rio Tinto Alcan's Yarwun refinery near Gladstone was commissioned in 2012 and will add up to 2 Mt to Australia's alumina production and the expansion of BHP Billiton's Worsley refinery in WA will add an additional 1.1 Mt.
Aluminium production in Australia also faces significant upheavals. The Kurri Kurri smelter in the Hunter Valley of NSW ceased aluminium production in October 2012. The smelter had operated since 1969 but Norsk Hydro announced in June 2012 that the plant would close because the high Australian dollar and low aluminium prices made it unprofitable. About 180 00 tonnes of aluminium was lost from Australian capacity.
The aging and high-cost Point Henry aluminium smelter at Geelong in Victoria is also facing an uncertain future. The owner, Alcoa Inc, is consolidating its business with a strategy of closing high-cost plants and boosting production at low-cost plants. Point Henry was thrown a lifeline by the Victorian and Federal governments in 2012 with a $44 million assistance package designed to help keep the plant running until June 2014. The results of the Alcoa review of operations are expected in March 2014.
More positively, the Bell Bay aluminium smelter in Tasmania was the beneficiary of a power deal between Pacific Aluminium and the Tasmanian Government in 2012. The Bell Bay smelter was established in 1955 and is the oldest aluminium smelter in Australia (and the first in the southern hemisphere). It produces around 180 000 tonnes per annum of aluminium. The power deal will provide the iconic smelter with lower energy costs until 2025.
Gove: The Gove bauxite mine and alumina refinery are located by the Arafura Sea in northeast Arnhem Land, some 650 kilometres east of Darwin. Operated by Pacific Aluminium, a Rio Tinto subsidiary, the Gove operation is the largest private employer in the NT with approximately 1400 employees and contractors. Current reserves (Proven and Probable) are 155 Mt of bauxite with additional resources (Measured and Indicated) of 45 Mt. Alumina grades are typically 49-50% Al2O3.
In 2012, Rio Tinto raised concerns about the ongoing viability of the Gove alumina refinery owing to the high cost of producing electricity from diesel generators. The company proposed a long-term gas supply arrangement via a 600-kilometre gas pipeline which the Australian Government agreed to support. In February 2013, the Northern Territory Government agreed to guarantee the supply of gas for 10 years and the company initially indicated that the Gove refinery would remain open. However, in November 2013, Rio Tinto decided not to proceed and announced it would suspend production at the refinery in February 2014 with a ramp down likely to be completed by July 2014. It is estimated that more than 1100 people will lose their jobs with the closure of the refinery but Rio Tinto will continue to operate the bauxite mine with the remaining 300 employees. The mine produced 7.943 Mt of bauxite in 2012.
Weipa: Weipa, on the western side of the Cape York Peninsula, is run by Rio Tinto Alcan Inc and is the only operating bauxite mine in Qld. As at December 2012, the deposit has Proven and Probable Reserves totalling 1534 Mt bauxite, a Measured Resource of 116 Mt, an Indicated Resource of 1351 Mt and an Inferred Resource of 455 Mt. Average aluminium grade is typically around 50-53% Al2O3. Currently, operations take in the East Weipa, Ely and Andoom bauxite deposits. About one third of production is shipped directly to China with the remainder sent to the Yarwun and Queensland Alumina Limited refineries at Gladstone. Weipa produced 23.257 Mt in 2012.
Approximately 45 kilometres southwest of Weipa, Rio Tinto continues with the development of the South of Embley project. In May 2012, the Queensland Coordinator General approved the project and in May 2013, the Australian Government gave environmental approval. In addition to a bauxite mine, the South of Embley project will comprise processing facilities and a port with barge and ferry terminals. Production will be up to 50 Mtpa of dry product, although initially it will be much less and ramp up in stages. The project is expected to extend operations at Weipa for another 40 years and underpin the continued operation of the Gladstone refineries.
Aurukun: In November 2012, the Queensland Government announced that it was seeking expressions of interest for the development of the Aurukun bauxite deposit, about 70 kilometres south of Weipa on the western side of the Cape York Peninsula. Aurukun is the largest undeveloped bauxite deposit in Queensland with a historical (i.e., not compliant with the JORC Code) resource estimated to be 614.8 Mt. Another three deposits just north of the Aurukun area were estimated in 1973 to contain an additional 73.2 Mt of bauxite.
Potential developers needed to be able to demonstrate experience in developing and managing mines and associated infrastructure, as well as experience in working with indigenous communities and traditional owners. Five companies were initially shortlisted for consideration: Aluminium Corporation of China Limited, Australian Indigenous Resources Pty Ltd, Cape Alumina Consortium, Glencore International AG and Rio Tinto Aluminium Limited. By September 2013, only Glencore and Australian Indigenous Resources remained in contention.
Pisolite Hills: In October 2012, the newly elected Queensland Government declared the Pisolite Hills project on the western side of Cape York to be a 'significant project for which an Environmental Impact Statement is required'. As a result, Cape Alumina Limited restarted the technical and environmental studies that were suspended in 2010 when the area was affected by the previous government's Wild Rivers Legislation.
In July 2013, the company released the results of a prefeasibility study for the Pisolite Hills project that confirmed the technical and economic feasibility of the project based on a potential yield of 7.5 Mtpa dry product over a mine life of 14 years. The Pisolite Hills resource is estimated at 134.6 Mt of bauxite.
In September 2013, Cape Alumina Limited agreed to merge with MetroCoal Limited to establish a multi bulk-commodity company with an initial focus on progressing the Pisolite Hills operation, including the establishment of a port at Mapoon. However, in November 2013, the Queensland Government announced that it would ban mining over the Steve Irwin Wildlife Reserve, which overlies a significant part of the Pisolite Hills deposit. As a result, the planned merger between MetroCoal and Cape Alumina was shelved and Cape Alumina announced that it had suspended work on the Pisolite Hills mine and port project. Pisolite Hills was to have been Cape Alumina Limited's flagship project enabling the company to establish an independent bauxite supply business to feed the growing alumina and aluminium market in China.
Bauxite Hills: The Bauxite Hills deposit is located approximately 50 kilometres north of Pisolite Hills and 95 kilometres north of Weipa. In December 2012, Cape Alumina released a prefeasibility study that confirmed the technical and economic feasibility of a mine producing 5 Mtpa of bauxite over 10 years. Bauxite Hills has an Inferred Resource of 64 Mt and is planned to be a mine and port project.
The company had planned to develop Bauxite Hills in conjunction with Pisolite Hills but following the suspension of activities at Pisolite Hills, the company has redirected its efforts to Bauxite Hills. Cape Alumina is also in discussions with the Queensland Government regarding the draft Cape York Regional Plan, which will have an impact on some of the company's tenements.
Hey Point: Hey Point is adjacent to Rio Tinto Alcan's South of Embley project and is unaffected by the draft Cape York Regional Plan. Hey Point has an Inferred Resource of 3.8 Mt of bauxite and potential as a small-scale direct-shipping operation. In November 2012, Cape Alumina announced that it was in the process of selling its Hey Point tenements to Racle Resources PL.
Skardon River: In March 2013, Gulf Alumina Limited announced a resource update for its bauxite deposit at Skardon River 80 kilometres north of Weipa. Skardon River now has a total resource of 71 Mt bauxite comprising a 29.9 Mt Measured Resource, a 32.1 Mt Indicated Resource and an 8.1 Mt Inferred Resource using a 17% SiO2 cut-off. The bauxite grade is around 50.3% Al2O3 with a 61.7% recovery rate.
In May 2013, the company announced that is had reached in-principle agreement with the traditional owners regarding proposed bauxite activity on the site.
Binjour: In June 2012, Australian Bauxite Limited published an increased resource of 24.5 Mt comprising an Indicated Resource of 15.5 Mt and an Inferred Resource of 9.0 Mt for the Binjour bauxite deposit located 100 kilometres southwest of Bundaberg. Average yield is 61% when the bauxite is sieved at 0.26 millimetres. The company claims this resource is based on less than 25% of the known extent of the bauxite. The deposit contains thick zones of premium gibbsite-rich bauxite, referred to as 'brown sugar', which is used as feedstock for sweetener circuits in alumina refineries. However, parts of the bauxite deposit are affected by veins of silica gel and the company is conducting tests with a view to removing the silica by simple screening. If successful, this would reduce the strip ratio for mining and increase the resource base significantly.
About 40 kilometres southwest of the main Binjour exploration tenements, near Mundubbera, Australian Bauxite has also been engaged in exploring privately held Mining Lease 80126 (Red Hill) with a view to acquisition. In December 2012, the company released a maiden Inferred Resource for this bauxite deposit of 3.5 Mt raw tonnage with a 67% yield when sieved at 0.26 millimetres. The deposit comprises a gibbsite-rich layer of bauxite from 1 to 7 metres thick with approximately half being suitable for direct shipping.
New South Wales
Taralga: In May 2012, Australian Bauxite released an increased bauxite resource for the Taralga-Mount Rae deposit located about 45 kilometres north of Goulburn. The new resource totals 37.9 Mt with a 63% yield when sieved at 0.26 millimetres. Of this total, 17.5 Mt is an Inferred Resource and 20.4 Mt is an Indicated Resource, with 53% of the resource suitable for direct shipping. This includes the occurrence of a 38 metre-thick continuous bauxite intersection at Mount Rae.
Inverell: In May 2012, Australian Bauxite released a resource upgrade for the Inverell bauxite deposit of 38 Mt with a 61% yield when sieved at 0.26 millimetres. This is comprised of a 20.5 Mt Indicated Resource and a 17.5 Mt Inferred Resource. The company claims that the bauxite is medium quality, low-silica, gibbsite-rich bauxite that is suitable for low-temperature alumina refineries.
Tasmania Project: In early 2012, Australian Bauxite began a drilling program exploring bauxite occurrences in central Northern Tas. In November 2012, the company released a maiden Inferred Resource of 5.7 Mt of bauxite with a 55% yield when sieved at 0.26 millimetres. This resource includes a raw unsieved Inferred Resource of 3.0 Mt that is suitable for direct shipping and, in March 2013, the company announced a memorandum of understanding with the Tasmanian Ports Corporation for access to Bell Bay Port in northern Tas.
In April 2013, Australian Bauxite began negotiations with potential offtake partner Xinfa Group, a large Chinese aluminium company. And in May 2013, the company lodged a Mining Lease Application and announced that its first bauxite mine in Tasmania will be known as Bald Hill with mining planned to commence in the second half of 2014.
The company continued its drilling program in 2013, particularly focussing on mine boundary definition and identifying new targets such as the Fingal Rail prospect, 11 kilometres north of Bald Hill. During the September 2013 quarter, five large pits at Bald Hill and Fingal Rail were excavated and trial mined with four of the pits rehabilitated. Four 50-tonne bulk samples were collected from four of the pits for dry-screening trials and analysis.
Aurora: The Aurora deposit, approximately 70 kilometres northeast of Perth near Bindoon, is the subject of a joint venture between Yankuang Group (China) and Bauxite Resources Limited. In 2010, the joint venture lodged a referral with the Environmental Protection Authority (EPA) of Western Australia for a mining operation producing up to 2 Mtpa of bauxite over five years. The EPA determined that a public environmental assessment (PER) was the appropriate level of review and the joint venture began a number of baseline studies as part of the PER process. In October 2013, the joint venture announced that it had withdrawn its referral to the EPA in order to concentrate on other, larger, bauxite resources in the Darling Range.
Ceres: During 2011, Bauxite Resources, in a joint venture with Shandong Provincial Bureau of Geology and Mineral Resources, carried out a drilling program comprising 3017 vertical holes for 7924 metres over an area of approximately 3500 hectares near the town of Williams, 150 kilometres southeast of Perth. In July 2012, the company released a maiden Inferred Resource for the Ceres bauxite deposit of 15.0 Mt with a total Al2O3 content of 40.9% with 3.0% reactive silica.
Cronus: During the September 2012 quarter, Bauxite Resources published a maiden Inferred Resource for the Cronus deposit, which is approximately 220 kilometres southeast of Perth. The new deposit totals 2.8 Mt of bauxite at 39.3% Al2O3 with 2.8% reactive silica.
Felicitas: In June 2012, the bauxite resource at Felicitas, approximately 60 kilometres northeast of Perth in the Darling Range, stood at 73.3 Mt. Bauxite Resources scheduled an extensional drilling campaign to run until June 2013 that would comprise 6029 holes on an 80 x 80 metre spacing for a total of 28 662 metres covering some 3300 hectares of mostly cleared farmland.
In early May 2013, Bauxite Resources upgraded the Felicitas bauxite resource to 33.1 Mt Measured, 49.1 Mt Indicated and 45.3 Mt Inferred for a total of 127.5 Mt. In late May 2013, the company published another upgrade for the Felicitas deposit of 35.3 Mt Measured, 65.3 Mt Indicated and 47.3 Mt Inferred for a total of 147.9 Mt of bauxite. The bauxite at Felicitas has a total Al2O3 grade of 39.4% and reactive silica grades at 1.9%.
Fortuna: In the first half of 2013, Bauxite Resources carried out a drilling campaign at the Fortuna deposit, which is adjacent to the Felicitas bauxite deposit. In May 2013, the company announced a maiden Inferred Resource for the Fortuna deposit of 26.8 Mt of bauxite and in September 2013, the company published a new Inferred Resource of 39.5 Mt. The resource is largely gibbsitic and has low amounts of reactive silica (total silica content is 5.2%).
Wandoo: In August 2012, Iron Mountain Mining Limited sold the Wandoo bauxite deposits, approximately 100 kilometres northeast of Perth, to private company Alpha Bauxite Pty Ltd for $4 million. As at December 2011, the total Inferred Resource for the Wandoo deposit was 89.3 Mt at 41.75% Al2O3 and 4.43% reactive silica.
Worsley: The Worsley mine (Boddington/Mount Saddleback) is located approximately 100 kilometres southeast of Perth and operated by BHP Billiton Limited as a joint venture with Japan Alumina Associates (Australia) Pty Ltd and Sojitz Corporation. As at June 2013, the Worsley bauxite deposit had a Measured Resource of 339 Mt including a Proved Reserve of 250 Mt, an Indicated Resource of 584 Mt including a Probable Reserve of 51 Mt and an Inferred Resource of 50 Mt. Average Al2O3 and reactive silica grades for the Worsley bauxite are 31.9% and 2.3%, respectively.
Ore is crushed at the mine and transported overland via a 50-kilometre-long conveyor belt to the Worsley refinery. The refinery produced 3.729 Mt of alumina in 2012 (3.295 Mt in 2011).
Huntly and Willowdale: Alcoa of Australia Limited operates the Huntly and Willowdale mines as well as the associated refineries at Kwinana, Pinjarra and Wagerup. Combined, these three refineries are the world's single biggest source of alumina, supplying 9.2 Mt of alumina in 2012. The alumina is either used in the company's aluminium smelters at Portland and Point Henry in Vic or exported to Southeast Asia, North America, South Africa, the Middle East, Russia, China and South America.
The Huntly mine (70 kilometres south-southwest of Perth), opened in 1976, is the world's largest bauxite mine with a mining rate exceeding 23 Mtpa. The Willowdale mine (100 kilometres south of Perth) commenced operations in 1983 and supplies the Wagerup alumina refinery. The combined mining rate of the two mines in 2011 was 34.3 Mt.
Probable Reserves for the Huntly and Willowdale mines combined are 34.7 Mt and Proven Reserves are 109.0 Mt. Available alumina averages 32.9% and reactive silica is less than 1%. To date, the company has not published resources.