RTX12366
Mining operations can be seen at the Rio Tinto alumina refinery and bauxite mine in Gove, also known as Nhulunbuy, located 650 kilometers (404 miles)east of Darwin in Australia's Northern Territory July 16, 2013. The frontrunner to become Australia’s next prime minister, Tony Abbott, holds ambitious plans to develop the country's sparse and inhospitable north by 2030 to attract a new wave of mining investment and boost agricultural exports to Asia. Picture taken July 16, 2013. Reuters/David Gray

Signalling a demand-crisis in bauxite, Australian Bauxite announced the suspension of production after it failed to find a suitable buyer for its first shipment of the aluminium-making material. In a statement to the Australian Stock Exchange, the Tasmania based company revealed its decision.

“ABx is taking steps to conserve cash until a sale of its maiden shipment is achieved,” it said.

“This includes a temporary suspension of production and haulage of bauxite products from its Bald Hill Bauxite Project at Campbell Town, Tasmania at the end of this week until sales commence,” it added.

Inventory problem

Australian Bauxite said its negotiations with buyers from China failed as large inventories of cheap Malaysian bauxite are piled up in many Chinese refineries. Inventories have been growing over the past five months, reports Reuters.

Globally, China tops in aluminium production. In the last couple of years, China has increased the volume of bauxite imports after its former supplier Indonesia clamped a ban on bauxite exports in early 2014. China found its best supplier in Malaysia to fill the gap left by Indonesia. As a result, Malaysian shipments to China surged nearly fourfold until November.

However, in January 2016, Malaysia imposed a three-month ban on bauxite mining, following environmental concerns. That move is expected to ease China's stockpiles.

Malaysian Bauxite

Australian Bauxite said in December that its first shipments faced problems because of low priced Bauxite exports from Malaysia, which further ramped up exports ahead of the rainy season.

The Australian company said uncertainty prevails over future volumes from Malaysia as far as the Chinese bauxite market is concerned. It also said its marketing partners are talking to many bauxite customers in India, the Middle East, Australia and elsewhere.

Alcoa resumes operations

Meanwhile, Bauxite miner Alcoa resumed its full operations after halting production because of the devastating bushfires in Western Australia's south west. It shut the Willowdale mine during the fire. The nearby Wagerup alumina refinery also curbed production as flames whipped through Yarloop town. Alcoa corporate affairs director Brian Doy said the company was yet to calculate the full cost of the blaze, reports ABC News.

“We've lost some infrastructure at the mine, an office building was destroyed at Willowdale, there was damage to power infrastructure that goes from the refinery to the mine, and some other minor damage to non-essential infrastructure but that's all being repaired,” he said.

RELATED STORIES