Australia’s Cape Alumina to start bauxite production in October 2015

Australian junior miner Cape Alumina expects construction at its Pisolite Hills project to be completed by mid-2015 and first bauxite production in late 2015, ceo Graeme Sherlock said on Tuesday.

The Pisolite Hills project in Queensland, has a resource of about 134.6 million tonnes with the potential to produce 7.5 million tpy of dry bauxite over a 14-year period, he told delegates at the Metal Bulletin’s 3rd Asian Bauxite and Alumina conference in Singapore.

China’s Xinfa has already secured a 1 million tpy bauxite offtake for 5 years of the project, Sherlock added.

The Pisolite Hills project will need capex of A$396 million ($376 million) for first production in October 2015.

“[The project is] located close to the coast and has ready access to the markets in China and India,” Sherlock said, adding that the area has export-grade bauxite and that major miner Rio Tinto has been in Cape York.

With the uncertainty surrounding the Indonesian ban on ore exports, Australia and bauxite projects such as Cape Alumina’s Pisolite would benefit, he said.

Cape alumina also has the Bauxite Hills project, which is expected to come on-stream two years after Pisolite Hills, and will produce 5 million tpy of bauxite.

Bauxite Hills mine and port project has a resource of 60 million tonnes and a potential mine life of 10 years.

“Raising capital has been a struggle for us in the last few years,” Sherlock said, adding that the merger with MetroCoal would make more cash available.

In September, Australia-listed MetroCoal and Cape Alumina announced plans to merge to create a diversified bauxite and thermal coal business.

The combined companies will have A$8 million in cash after the merger, which should be enough to fund the initial studies through which they hope to reduce the capex needed for Pisolite Hills.

“Cape Alumina is well positioned to become Australia’s leading exporter of bauxite,” he said.