Alcoa to increase global capital investment in order to expand bauxite operations

<p>During the release of 4^thQuarter and Full Year results, Alcoa&rsquo;s Chief Executive Officer Roy Harvey says the company wants to &ldquo;dramatically&rdquo; ramp up its WA bauxite exports after last month&rsquo;s first shipment of ore from its Huntly Mine in WA.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/huntly%20mine.jpg" alt="news" width="517" height="226" /></p> <p>Alcoa made its first commercialbauxite shipment from the Huntly mine to China in late December, after the signing a 400,000 tonne bauxite supply agreement with a Chinese refiner.</p> <p>Alcoa has been authorised to export up to 2.5 million tonnes of bauxite annually for five years, and the Alcoa CEO told analysts during the quarterly earnings call that the company hoped to quickly expand its bauxite operations to leverage on the agreement.</p> <p>Alcoa is now selling about six million tonnes of product a year to third-party refiners, though the company has not confirmed the prices of the products. The spot prices for high-grade bauxite were above $50 a tonne when Alcoa made its first shipment from WA in December. According to Alcoa CFO William Oplinger its margins on bauxite sales from Australia and Brazil were about 35 per cent.</p> <p>As Alcoa CEO Mr Harvey said, the company has plan to increase is global capital investment budget to $US150 million to expand its bauxite operations.</p> <p>&ldquo;We continue to see great opportunities in the merchant bauxite markets and with modest capital expenditures we can increase our third-party sales volumes dramatically,&rdquo; Mr Harvey said.</p> <p>{googleAdsense}</p> <p>&ldquo;During 2016 we started to build partnerships with key customers in China and elsewhere that can flourish and grow as we build out this highly profitable business,&rdquo; he added.</p> <p>Alcoa produces about 35 million tonnes of bauxite annually at its Huntley and Willowdale mines in the Darling Range which used to be shipped exclusively to its Kwinana, Pinjarra and Wagerup refineries. About 45 million tonnes of bauxite is produced annually by Alcoa in Australia and Brazil.</p> <p>Alcoa&rsquo;s Pinjarra refinery, which is its lowest-cost operation globally reported record production in the December quarter.</p>