Alumina targets bauxite exports despite Malaysian supply boom...

Alumina targets bauxite exports despite Malaysian supply boom

Peter Ker
Published: August 19, 2015 - 6:14PM

Malaysia's sudden emergence as a significant bauxite exporter is unsustainable, aspiring Australian bauxite exporter Alumina says.

Alumina and joint venture partner Alcoa have long mined bauxite for conversion into aluminium products, but have recently flagged a desire to start exporting Australian bauxite in a raw form.

The change in attitude follows a turbulent 18 months in bauxite markets. Prices for the bulk commodity rose to a record high of $US73.80 per tonne in May 2014, before sliding back to the low $US50 per tonne range in recent weeks.

The recent slide had been largely blamed on opportunistic, and in some cases amateur, mining in Malaysia, where bauxite exports rose from zero to 20 million tonnes in one year.

Alumina chief executive Peter Wasow said he did not think Malaysia's impact on bauxite markets would be sustained, labelling it a "temporary solution" for Chinese consumers who were short of bauxite.

"The Malaysian temporary solution is not going to be satisfactory or sufficient for the long-term needs of China," he said.

Mr Wasow said Malaysian bauxite was lower quality than the bauxite found in Western Australia and the Cape York region of Queensland, and was typically found in smaller deposits, meaning Chinese customers could not rely on Malaysia to deliver a consistent product long term.

"A refinery is a continuous, high-temperature, high-pressure process and it requires a very standardised input of bauxite to get the maximum yield. When every cargo is different, you wind up getting huge inefficiencies," he said.
Mr Wasow's conclusion is similar to bauxite expert Al Clark.

He told Fairfax Media last week that he expected Malaysia's influence on bauxite markets to have disappeared by 2017.

Alumina and Alcoa do not yet have a licence to export bauxite from their operations in Western Australia, but are negotiating with the state government.