Ocean Freight costs remain at historically high levels during Q1, says Metro Mining

Metro Mining reported sharp increase in Ocean Freight costs across all vessel classes in the first quarter of 2021.The increase was due to new and longer shipping routes caused by changing Chinese buying patterns, stronger commodity prices, limited new vessel builds during 2020 with the uncertainty of COVID, and heavy ports congestion.

“Ocean Freight costs remain volatile and remain at historically high levels. Given bauxite is normally priced on a CFR basis, this will negatively impact the net prices achieved by Metro, particularly in the short term, and hence reduce operating margins,” Metro Mining said.

Around 2.3million WMT of bauxite will be sold under the offtake agreement in place with Xinfa. “Metro have been progressing further sales for 2021 deliveries along several fronts, with negotiations progressing, albeit slowly as the market recovers from its COVID driven malaise. These discussions are contemplating a pricing structure linked to the prevailing bauxite market price.”

The company’s Stage 2 Expansion remains the core strategy for the long-term future of Bauxite Hills. The largest component of Stage 2 is the construction and mobilization of a Floating Terminal to Skardon River.

“Assessment has begun on the existing kaolin resource at Skardon River to determine potential commercial uses, including the production of High Purity Alumina,” Metro said.

Metro’s available cash on hand and other receivables as at 31 March 2021 was $15.7 Million.