By Rachel Dally-Watkins
22 June, 2015
WITH the commencement of mining operations in late 2014, Australian Bauxite has ushered in the first new Australian bauxite mine for more than 35 years.
The Bald Hill mine is also Tasmania’s first ever bauxite mine, and the first in a pipeline of projects to ship gibbsite trihydrate bauxite with low silica contamination that can be processed into alumina at low temperature to customers in China and India.
Australian Bauxite chose its projects based on three contributing factors, according to managing director Ian Levy. The result is tenements that all contain good quality bauxite, are in close proximity to infrastructure connected to export ports, and free from socio-environmental constraints. Australian Bauxite’s portfolio of tenements is 100 per cent owned, unencumbered and free of third party royalties.
The company has assets in Tasmania, Queensland and NSW, placing it in a strong position to meet global demand for the commodity.
According to Australian Bauxite managing director Ian Levy, demand for bauxite had picked up because of China and India.
“Initially all bauxite projects were developed to feed directly into an alumina refinery and in those years, back in the 1970s and 1980s, China imported all of its aluminium,” Mr Levy said.
“But as China started to develop the plastics industry it started to produce caustic soda as a by-product of PVC manufacture and moved into the aluminium industry – but they don’t have our type of bauxite available in China.
“Our bauxite is very similar to the West Australian bauxite mined by Alcoa south of Perth. You can process it at a refinery at 140 degree centigrade, whereas the bauxite that China has available has to be processed at 250 degrees centigrade.
“So their low temperature plants are reliant on imported bauxite, which means that suddenly there was a market for seaborne traded bauxite – and it only became noticeable in 2002.”
Australian Bauxite planned to ship 440,000oz of bauxite from its Tasmanian assets in 2015, increasing this to 2 million tonnes per annum by 2017-2018 by opening additional bauxite operations.
The company will produce from three production centres in the state: Campbell Town, DL-130 and Portside. Mr Levy said the centres would operate in parallel, with each centre to have three or four mines.Australian Bauxite’s total Tasmanian resources totalled more than 9 million tonnes of bauxite.
Campbell Town production centre
Campbell Town is the first of the production centres to become operational, and to date contains three deposits – Bald Hill, Fingal Rail and Nile Road – with an initial resource estimate of 3.5mtof bauxite. The bauxite from these northern Tasmanian assets will be transported by rail to Bell Bay Port for export.
Mining at Bald Hill began on-schedule in December 2014, and as of late March 2015 it had produced about 10,000t of bauxite and screened about 7000t of bauxite. The mine would continue to ramp up to reach a nameplate capacity of about 500,000 tonnes per annum.
As a result of a strategic alliance with the Noble Group, Bald Hill is fully funded and has the added benefit of having a globally significant partner to assist in marketing its produce.
According to Mr Levy, Bald Hill uses all local contractors and as many local employees as possible, and this, together with the company’s strategy of “only operating where we’re welcome”, has created a relaxed operating environment beneficial to local residents.
“We have a company policy that no matter what the law is, we never go where we’re not invited,” he said.
Mr Levy said this strategy had seen lots of benefits, particularly in regards to the welcoming environment experienced in the communities it operated in.
“The Bald Hill project itself only employs about 45 people, but in Tasmania that’s a positive,” Mr Levy said.
“The most important thing is we pay mining wages so there’s a high multiplier factor in Tasmania – its actually one of the highest multiplier factors in Australia,” he said.
“Tasmania gets a lot of benefits out of one regular full paying job, and it does create other work in Tasmania, so it’s quite pleasing.
“In all there’ll be possibly 180 families that get an income out of our project. Now that’s small compared to say an iron ore mine up in the Pilbara, but because people live in their own communities in their own homes – it’s different from a fly in, fly out situation – the benefits are immediate and noticeable in those communities.”
Australian Bauxite has a second mining lease at Fingal Rail, 11km north of Bald Hill. According to Mr Levy, the company was planning to bring this deposit into production next. Fingal Rail is similar to Bald Hill in that it has direct shipping ore, major road and rail capacity, and stockpile and port capacity.
“It’s a bit of a no-brainer as an efficient producer,” Mr Levy said.
The third asset within the Campbell Town production centre is Nile Road, 10km from Fingal Rail.
According to Australian Bauxite, the deposits at Fingal Rail and Nile Road extend beyond the resource limits used in its current estimates and will be further explored when required. Resource estimation is currently underway for Nile Road.
DL-130 production centre
The DL-130 production centre contains the DL-130 and Rubble Flat deposits, with further exploration underway to identify additional targets.
This production centre is mainly on harvested and disturbed hardwood plantation land west and northwest of Launceston. Australian Bauxite has established a maiden resource for the centre of 5.7mt of bauxite.
This production centre has existing haulage road and a trucking route to Bell Bay Port, however the company had not yet decided which township would be the production base for this area.
In March, drilling was underway at the centre and a revised resource estimation was expected in the coming months, which would include the Rubble Flat discovery.
Australian Bauxite stated that DL-130 was a likely candidate for early production, possibly in 2016 at about the same time as Fingal Rail enters production.
Portside production centre
In late May, Australian Bauxite announced it had discovered what would most likely be its third production centre, following the return of high grade assays from drill holes at the PR-18 deposit north of Launceston.
Once all assays from the new PR-18 discovery are received and interpreted, additional drilling of several other known targets within the Portside area will be undertaken as “a matter of some urgency” the company stated.
Baseline environmental studies would be undertaken spring to confirm there are no socio-environmental barriers to development at the site.
“This discovery is a result of Australian Bauxite’s proprietary exploration technology and efficient drilling by the Australian Bauxite exploration team,” Mr Levy said.
“Bauxite potential in this area was downgraded by early explorers because surface samples were low grade. Australian Bauxite encountered similar surface results but the Australian Bauxite exploration technology showed that good bauxite should exist in this area. So [we] drilled 68 reconnaissance drill holes and the eighteenth hole discovered this excellent bauxite in an ideal location.”
Towards the end of the year when the weather improved, Mr Levy said he expected the company would move drill rigs up to the 24.5mt Binjour project in Queensland, with the aim of drilling a new discovery plateau late this year.
“Binjour is our largest project – its a real company flagship project, a 30 to 50 year project at world-class scale,” he said.
“If all goes to plan, mid next year we would start an engineering scoping study to see what has to be done to bring it into production.”
Mr Levy said that the company’s NSW assets had been put on the backburner while “waiting for Port Kembla to be expanded so that it can take our large tonnages”, leaving the focus very much on Tasmania for the next six months.
“The big announcement to come in that period will be the first shipment, and then the second shipment, of bauxite from Bald Hill,” he said.
“Then there will be exploration at Binjour, as well as some more results on resource upgrades in Tasmania, and following up on the discovery of the third production centre, Portside.”