Metro Mining signs new offtake for Queensland bauxite mine
12:59 21 Dec 2017 Shares were up by more than 4% to $0.245 in early afternoon trade.
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Production from the Bauxite Hills mine is scheduled to begin in April 2018 Metro Mining Ltd (ASX:MMI) has signed a non-binding Memorandum of Understanding regarding an offtake agreement from the Bauxite Hills Mine in Far North Queensland.
The agreement is with Chinese state-owned company SPIC Aluminium and Electric Power Investment Co Ltd.
It covers the supply of 6.5 million tonnes of bauxite over four years starting in 2018. READ: Metro Mining commissions critical infrastructure at Bauxite Hills Mine
The Bauxite Hills Mine is on schedule to begin production in April 2018 following the end of the wet season.
The Memorandum of Understanding complements Metro’s existing binding offtake agreement with Xinfa for 7 million tonnes over four years.
The company also has a non-binding Letter of Intent with Lubei Chemicals with negotiations regarding a binding offtake agreement continuing. Agreements represent 100% of initial output
Taken together these agreements represent 100% of the mine’s planned output from 2018 and 2019, and 90% of the possible expanded capacity from 2020 and 2021.
Simon Finnis, managing director, said: “Once again this demonstrates the strong appetite for our bauxite in the Chinese refining market, and validates our mining and marketing strategy.”
Sales from the SPIC agreement are expected to start in May 2018 with 500,000 tonnes to be supplied in 2018, 1 million tonnes in 2019, 2 million in 2020 and 3 million in 2021. Large, state-owned enterprise
The parent company of SPIC, State Power Investment Corporation, is a large state-owned enterprise.
It was recently established through the merger of China Power Investment Corporation and State Nuclear Power Technology Corporation.
The aluminium division, SPIC Aluminium and Electric Power Investment, has annual aluminium smelting capacity of 2.5 million tonnes and alumina refining capacity of 2.6 million tonnes.
QBL Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
