Metro Mining sees a positive year ahead aiming at selling 2.3 million tonnes of bauxite to Xinfa

Metro Mining is projecting a positive year ahead with sales expected to progress, including 2.3 million tonnes under an offtake agreement with Xinfa. The company is also satisfactorily placed in terms of financial position for 2021, led by the robust bauxite deliveries during the June and September quarters of 2020.

Metro Mining’s Bauxite Hills Mine project moved into the wet season shut down earlier than usual in September 2020 due to the COVID-19 impact and downtrend in commodity prices. But in the December quarter, the mine started working towards maintenance and haulage fleet across the site to resume operations in April 2021. Key land-based activities undertaken during the quarter include maintenance of haul roads and creek crossing, which will accelerate further towards the end of the March quarter as the wet season winds down. Other activities undertaken are heavy maintenance of the prime movers and trailer sets and maintenance of camps and accommodation facilities for restarting the mining activities.

The company targets to sell 2.3 million wet metric tonnes of bauxite of the total production in 2021 to Xinfa, alongside other deliveries that are currently under negotiations, albeit slow as the market is still recovering from the COVID-19 mayhem. The negotiations are contemplating a pricing structure linked to the prevailing bauxite market price.

Metro is negotiating a long-term contract that, if successfully finalised, will commence in 2022 and stretch over five years.

Stage 2 expansion is the core strategy for the long-term future of Bauxite Hills. But the timing for the formal commitment to stage 2 development depends on economic conditions across the aluminium supply chain in China and new long-term offtake agreements with customers.

At the end of the December quarter, Metro’s cash on hand and other receivables were $25.6 million compared to $45.8 million in the previous quarter.