Alumina Ltd mulls bauxite export; terms Malaysia’s supply strategy “unsustainable”

Australian mining and metal major Alumina termed Malaysia’s sudden emergence as bauxite exporter in the global market as unsustainable. Alumina and Alcoa have long been jointly engaged in bauxite mining operations. Their prime objective was to convert the ore into aluminium products. However, with the recent turbulence in the bauxite market which has been persisting longer than it was expected, the JV partners have decided to export Australian bauxite in its raw form.

Prices for the bulk commodity peaked at $US73.80 per tonne in May 2014, before coming down to $US50 per tonne range in recent weeks. The recent slump had been blamed largely on opportunistic, and in some cases amateur mining in Malaysia, where bauxite exports rose from zero to 20 million tonnes in one year.

Alumina chief executive Peter Wasow said he did not think Malaysia's move to export bauxite would have any sustained impact on the market, labelling it a rather "temporary solution" for Chinese market that runs a bauxite deficit. He further added that the bauxite mined in Malaysia was inferior in quality than that found in Western Australia and the Cape York region of Queensland, and was found typically in smaller deposits, which were clearly inadequate to meet the continuous, long-term demand of Chinese customers.

Alumina and Alcoa do not have a licence yet to export bauxite from their operations in Western Australia; but talks are on with the state government, and hopefully they will get it soon.

Alumina shares closed 4¢ higher at $1.335.