there you go....link below. Can expect ABZ to go up mimicking BAU's 28.5% rise today?
November 12, 2012 12:00AM
CHINESE bauxite imports from Indonesia fell to zero in June and July.
Yet in 2011, China obtained almost 80 per cent of its imported bauxite from that country. And last year's quantity was double that obtained from Indonesia in 2009.
Stephen Bartrop of Lime Street Capital poses the obvious question: considering that China needs to import about a third of its bauxite requirements, who is going to fill the gap if Indonesia sticks to its guns about requiring minerals to be processed before they are exported? In all, 32 types of raw materials were slapped with the export ban -- to take full effect by 2014 -- along with an interim 20 per cent export tax.
That policy itself was thrown into doubt last Wednesday when Indonesia's supreme court annulled four sections of the original ministerial decree establishing the export ban. The appeal had been brought by the Indonesia Nickel Association and various local government bodies.
However, by Friday reports were quoting the Energy and Mineral Resources Ministry, saying it would maintain the export ban and was working on a new regulation to bring the original decree into line with the court ruling.
Bartrop, whose firm also manages the LSC Australian Resources Hi-Alpha Fund, was giving an overall review of where the resources industry stands.
As far as bauxite goes, he sees the Indonesian ban as an opportunity for new Pacific region suppliers.
This comes at a time when the future of the Gove bauxite mine and alumina refinery in the Northern Territory is now the subject of a strategic review, the operation having been affected by high fuel prices, high exchange rates and a low alumina price.
Bartrop notes increasing capital costs as one of the impediments to Australia taking advantage of this supply gap.
But other countries also have issues. China, which is the main importer, suffers not only from a shortage of domestic bauxite but many of its deposits are of low quality. In India, the government is hostile to bauxite exports and environmental hurdles stand in the way of developing some projects.
Of course, there's Guinea with its enormous bauxite resource. But political unrest is always a threat in that West African country and the government there is in the process of raising royalties and taxes -- and there are plenty of buyers jostling for Guinea's output.
So what more fortuitous timing could Australian Bauxite (ABZ) wish for with its announcement on Thursday of a 5.7 million tonne maiden resource in northern Tasmania? The deposit is within 100km of Bell Bay port and the company says less than 10 per cent of the target area has been drilled. It also says 50 per cent of the bauxite layer so far drilled consists of direct-ship grade, which can be sent to the port without any processing at the mine site.
ABZ has 41 bauxite tenements in Queensland, NSW and Tasmania and so far a total resource of 112.1 million tonnes.
