Australia's Queensland opens bid process for Aurukun bauxite leases
Sydney (Platts)--27Nov2012/445 am EST/945 GMT
Australia's state government of Queensland opened Tuesday an Expressions
of Interest process for bauxite mining leases at Aurukun in the western Cape
York region, where reserves are considered sufficient to support bauxite
production at 6.5 million mt/year.
Deputy premier Jeff Seeney said the government will initially shortlist
up to five candidates for the right to develop the resource, before making a
selection by the end of 2013.
The deadline for the EOIs is February 15.
Seeney said the Department of State Development, Infrastructure and
Planning will be managing the bid process.
"Proponents must be able to demonstrate experience in development and
management of mines and associated infrastructure, experience in working with
indigenous communities and traditional owners to negotiate outcomes, and the
financial capacity to take on this scale of project," Seeney said in a
statement. He reiterated that proponents will not be required to build an
alumina refinery in Queensland.
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In 2011, the state government under the former premier Anna Bligh,
revoked the Aurukun bauxite mining permits held by Chalco.
The Chinese company was granted the permits in 2007.
As part of the permit conditions, Chalco agreed to build a 3.3 million
mt/year alumina refinery at Abbot Point, south of Townsville in northeastern
Queensland, and bauxite-loading port facilities north of Aurukun to link the
But Chalco withdrew the investment plans in July 2011, citing
deteriorating global conditions in the aluminum industry and a 30% decline in
global aluminum prices in the three years since the agreement was signed.
At the time, Australian media quoted head of Queensland Resources
Council Michael Roche as saying he was expecting strong renewed interest in
the mining leases given there were about 10 interested parties the first time
around, including Alcoa, Rio Tinto and Rusal.
Moreover since May, China has been turning to Australia for more
bauxite, after traditional supplier Indonesia imposed a 20% tax on bauxite
exports, as well as revoking mining and export permits of certain companies.
China's imports plunged in June to just 187,355 mt after Indonesia's
export revisions. By October, they had rebounded to 2.14 million mt but were
still down on year by 30.6%.
Indonesia's curbs are part of a drive to encourage local processing of
metal ores. Jakarta has said it plans to ban all exports of bauxite and other
raw minerals by 2014.
In the interim, the government put in place from May a new system of
granting local companies short-term mining and export permits, and quotas to
be renewed every three months.
Last year about 34% of Chinese alumina production was based on imported
bauxite, with 75-80% sourced from Indonesia, analysts have said.
In the last year, vertically integrated aluminum producers including
Alcoa and Rio Tinto have said that prospects for margin growth were moving
upstream, due to the cyclical downturn in the aluminum sector. Last November
Rio Tinto listed bauxite among key-growth plans that were expected to help
its aluminum business segment achieve an EBITDA margin of 40% in 2015, from
--Joanna Lim, email@example.com
--Edited by Martin O'Rourke, firstname.lastname@example.org