recommendation

Hey all,
In the aftermath of the notorious ,Tagme, I understand his view point differed from most of ours , but what I could not comprehend was his reasoning. Bauxite is one of the worlds most abundant minerals . Yes it is found in many a place. But this does not mean that one should not attempt to capture a small share of the available market. Tagme's reasoning was that because Vietnam had cosiderable bauxite resources available as well as other asian nations then Bauxites attempt to supply Chinese producers was doomed to failure. But that is the basis for competition in all markets for every known product or service. His reasoning suggets that because a market exists with established players one should not even attempt to enter that market. Tagme , Bauxite resources is not going for world domination they are marely attempting to capture a slice of a growing market. Try to comprehend this. They will do so by making their product more attractive to producers through many avenues available to them as all new market players in all known markets need to in order to establish themselves. We, who chose to invest in BAU believe they will be successful in firstly becoming a bauxite supplier and further becoming an Alumina Producer .

Anyway, here is small part for all to read.
***Bauxite Resources applies for 13 exploration licenses in the Darling Ranges

In the March issue we looked at how rising energy prices would affect the global aluminium industry. Our conclusion, if you’re not interested in reading the whole story, is that global aluminium production would migrate toward companies (or countries) with abundant energy resources. But while these countries (most in the Middle East) have energy in abundance, they don’t have bauxite.

You need bauxite to produce alumina. And you need alumina to make aluminium. Aluminium itself is one of the metals that stands to benefit from urbanisation in China and rising standards of living in the developing world. You find it in cars, airplanes, and reams of consumer goods. Chinese consumption of aluminium has quadrupled in recent years and now accounts for 22% of world consumption.

The race for high-quality bauxite deposits close to existing infrastructure is on. This week, Bauxite Resources Ltd. (ASX:BAU) announced it had applied for 13 more exploration licenses in the Darling Range in WA in the last two months. The nice thing about exploring for bauxite in the Darling Range is that you know it’s probably there. The region already provides nearly 17.5% of the world’s alumina.

Bauxite now has 38 exploration licenses in the Darling Ranges. A lot of drilling lies ahead to turn that prospective area of more than 7,500 square kilometres into a reserve figure shareholders can wrap their heads around. Right now, Bauxite’s initial exploring hopes to produce a bauxite resource of 30 million tonnes, from which it could produce 2 million tonnes per year of direct shipping ore (DSO).

DSO ore is ore that is already high grade and does not require any beneficiation before being exported. In the iron ore industry, high-grade hematite ores with 63% or more iron content would be an example. Magnetite, on the other hand, doesn’t generally qualify as DSO.

Practically speaking, Bauxite’s operating costs will go down because of its high grade ore. Also, the bauxite deposits in the Darling Ranges can usually be developed by stripping 3-10 metres of overage. They don’t require a lot of expensive drilling to locate, or a lot of expensive blasting and open pit mining to produce.

Even further down the track, Bauxite Resources has said it would consider building an alumina refinery in WA with the help of a joint-venture partner. But in the meantime, the company continues to scoop up exploration licenses in the Darling Range.

We’re not suggesting that bauxite is undergoing the same structural revaluation as iron ore did beginning in 2004. But with supply disruptions in Indonesia and China and gradually rising aluminium prices, the case for accumulating a large Australian bauxite resource is getting stronger day by day.
Cheers Soulbrother.