According to a report from Proactive Investors Australia, Queensland Bauxite expected to have a breakthrough in Australian bauxite.
Queensland Bauxite has, over the past several months, been working away behind the scenes, building towards results that could catapult a $4 million microcap into Australian mining folklore.
This 1.3c goldfish holds a whopping 7,180km2 of bauxite projects that have the very real potential to transform it into a whale.
QBL’s South Johnstone project in particular looks like a company maker. In November last year, QBL revealed the discovery of an entire bauxite field.
And now, after years of effort and millions spent, QBL are set to reveal exactly what it has up its sleeve.
The London Metals Exchange report indicates that not only are aluminium prices breaking out from a recent trading range, but stockpiles of this essential commodity are plummeting:
This indicates that aluminium prices, and thus bauxite prices, are likely to continue their ascent into the foreseeable future.
Last year, China garnered over 65% of its bauxite it needs from Indonesia, which equates to almost 50 million tonnes. So, when China became aware of Indonesia’s plan to ban bauxite exports, it stockpiled a veritable war chest of the stuff.
China’s stockpile is already dwindling, and may be completely exhausted over the next 12 months.
Wood Mackenzie is a global metals and mining research and consultancy group founded way back in 1973.
Head of Metals and Mining Research, Julian Kettle had this to say in early May: “With China's alumina demand set to increase so sharply, there will be huge implications for bauxite demand.
We estimate China will need access to as much as 240Mt of bauxite by 2030 and as it only produced 72Mt domestically in 2013, huge uncertainty remains over the import versus domestic supply mix."
Chinese bauxite imports from Guinea are costing more than A$100/tonne CIF. While the current price in US dollars has risen strongly to US$60 a tonne. The evidence is overwhelming – bauxite demand is outstripping supply, and prices are headed further north.
When a commodity trend changes from cold to hot, and eagerly anticipated drilling results combine, the effect on a share price can be something to behold.
The price of bauxite has taken a little longer to respond, because warehoused stockpiles were greater.
But now that these stockpiles are in decline, and Chinese hoarding has begun, bauxite and aluminium prices are gathering some serious steam.
If QBL’s results are positive, current shareholders could be served with windfall profits.
