Australian bauxite production and export expected to rise in next three financial years

According to a Platts’ report, Australia is expected to produce 82.7 million tonnes of bauxite in FY 2016-2017 (July-June), up 1.22% YOY, as confirmed by the Department of Industry, Innovation and Science on Friday. Upcoming projects in the state of Queensland are expected to raise Australia's bauxite production from fiscal 2017-2018, the report said. 

Metro Mining's Bauxite Hills project (5 million tpy) and Rio Tinto's Amrun project (23 million tpy) which are expected to start operation in FY 2017-2018 and FY 2018-2019 are two of major upcoming bauxite projects in Queensland.  Based on the assumption, Australia's bauxite production is expected to grow at a rate of 6% per year for next three financial years to reach 98 million tonnes in fiscal 2019-2020, the report added. 

According to DIIS, Australian bauxite exports are estimated to rise 19% YOY in FY 2016-2017, driven by increasing overseas demand and lower domestic consumption. The volume is projected to increase at an annual rate of 3.4% from FY 2017-2018 to 29 million tonnes in FY 2021-2022. 

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However, according to DIIS exports are expected to grow at a relatively slow pace in the medium term.  This is primarily attributed to higher production in Guinea, partial lifting of the ban on bauxite exports in Indonesia in January, and the expected withdrawal of moratorium on bauxite mining in Malaysia in the September quarter of 2017. DIIS feels the reopening of bauxite production in Malaysia is likely to make bauxite supply available to China, putting further pressure on Australian bauxite exporters.