Australia's Metro Mining extends strategic partnership with Xiangsen Aluminium for bauxite supply until 2026

The Australian mining and exploration company Metro Mining Limited has extended the Strategic Cooperation Agreement with China's Xiamen Xiangsen Aluminium Limited (Xiangsen) for 1.5 million DMT per annum for 2 years until 2026. In addition, binding terms for the 2023 offtake component have been agreed upon, making the total binding offtake for 2023 5 million WMT.

It was announced on November 25, 2022, that Metro would supply approximately 5 Million WMT of bauxite between 2022 and 2024 to Xiangsen Aluminium. This supply agreement has been extended by a further 3.4 million WMT over two years into 2026.

The quality specification continues to be the Metro Blend. The 1.1 million WMT of offtake commitments by Xiangsen under previous and current agreements have been met. The 1.7 million WMT commitments by Xiangsen for 2022 have also been met. For 2023, binding terms have been agreed upon. Pricing terms are confidential but comprise a formula related to the Chinese alumina price within a 'floor' and 'ceiling' range, ensuring Metro can benefit from improved market conditions. 3.3 Million WMT offtake for 2023 is already contracted with foundation customer Xinfa as disclosed in previous announcements, which takes Metro's target sales to 5.0 Million WMT.

Simon Wensley, the Managing Director and CEO of Metro Mining, said: "Xiangsen has been a reliable partner for Metro during 2021 and 2022, aiding our strategy of diversifying our customer base and use of large Capesize vessels. The extension of this significant Strategic Offtake Agreement is a sign of trust and cooperation between the parties. It recognises the value of Metro's low-risk environment, consistent quality, contract agility, technical service and large vessel delivery capability. The binding terms for 2023 provide increasing price upside for Metro whilst also giving certainty to the customers."

As a result of this agreement, the medium-term sales portfolio continues to evolve toward a more diverse set of quality specifications, pricing periods, and formulas to diversify exposure to market trends. Currently, the Bauxite Hills Mine and supply chain are operating at full capacity and will continue until 2023, when the expansion to 7 Mt/a capacity is complete.

Zhou Hailong, the Deputy Managing Director of Xiamen Xiangsen Aluminium Ltd., said: 'Our partner refineries have found the quality of MMI bauxite helps to improve the quality of alumina produced. MMI bauxite, with its proximity to the Chinese market, low ocean freight, stable quality, and deficient sulphur, is well suited for our High-Temperature plants. I appreciate the Metro team's continued commercial and technical support and cooperation. Together, we are targeting more refineries with similar bauxite quality requirements across China."