Asdion wins 4 million tonne bauxite supply deal to China

IT and logistics provider Asdion Bhd has won a RM414 million deal to supply four million dry tonnes of bauxite to China from July, more than Malaysia's entire bauxite exports last year.

China is the world’s biggest producer of aluminium, which is extracted from bauxite.

Asdion sealed the deal with the Hong Kong International Mining Exchange Ltd for the supply of bauxite to Hong Kong International Mining Exchange Ltd (HKIM), whose business is in the trading of commodities.

Under the agreement, Asdion’s subsidiary TAZ Logistics Sdn Bhd will provide logistics-related services to HKIM for the delivery of a total of four million dry tonnes of bauxite at a base price of US$28 per dry tonne.

Yesterday, Bloomberg reported that Australia had overtaken Malaysia as China’s top supplier of bauxite in May after falling behind a month earlier.

China bought 1.61 million metric tonnes from Australia in May from 1.62 million tonnes a month earlier and 1.24 million tonnes last year, customs data show. Shipments from Malaysia fell 23% from April to 1.58 million tonnes.

The world’s second-largest economy sought alternative supplies after Indonesia halted shipments of raw ore including bauxite, nickel and copper, in January 2014 in a bid to spur domestic processing. China imported 3.83 million tonnes in May, less than half a record 8 million tonnes in January last year, Bloomberg said.

“Malaysia has emerged as a strong contender” to replace Indonesia, Morgan Stanley said in a June 22 report.

The bank estimates China will need a total of 35 million tonnes in 2015.

“Malaysia is capable to supply more” as there are new mines starting to produce, Wan Ling, the assistant chief representative in China for researcher CRU, told Bloomberg.

Shipments will probably expand to 12 million tonnes this year, she had said last week. Cargo in May has already jumped about 20-fold from a year earlier.

Production in Malaysia more than quadrupled to 962,799 tonnes in 2014 from 208,770 tonnes the year before, data from the Minerals and Geoscience Department in Kuala Lumpur show. – June 25, 2015.