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Bauxite Offtake Agreement

Also note the bar chart that shows China`s expected bauxite consumption, particularly its increasing dependence on imported bauxite due to a sharp decline in domestic supply. With regard to the industry outlook, it should be noted that Metro would put its modernized facilities into production at a time when Chinese demand for bauxite is growing sharply. In the following video, Simon Finnis, MMI`s Managing Director, speaks with Morgan Senior Bauxite Market and Labour Analyst at the Bauxite Hills mine. Aluminium, which has aluminum refineries, is present in Shanxi, Shandong Guangxi and Guizhou provinces. Bauxite is delivered to the Shanxi refinery, which is currently operating below capacity due to reduced bauxite availability in the region. But the company has everything investors are looking for in a mining group – a long-lived mine, established production, start-up agreements, robust margins, profitability and opportunities to improve its already strong margins should the expected doubling of production occur in the coming years. Metro Chief Executive Simon Finnis hailed the deal as positive evidence of the company`s current business strategies. Five months after the start of mining, Metro Mining shipped one million tonnes of bauxite from its Bauxite Hills mine north of Weipa in Westkap York. Delivery is considered an important step in the conclusion of a long-term acquisition agreement with SPIC. Metro`s positive operating situation and growth prospects therefore provide excellent leverage for a sweet spot in the bauxite industry. The Bauxite Hills mine has an estimated ore reserve of 92.2 million tonnes and a total resource of 144.8 Tm.

with an estimated lifespan of 17 years. The mine is now becoming a global bauxite degradation and will feed the growing market for seebauxite. Metro tends to go under the radar, probably because its main commodity is bauxite, but also because it has a market capitalization of less than $200 million. Metro says the agreement follows a 7 million tonne-a-year offtake agreement with compatriot Xinfa, as well as a non-binding Memorandum of Understanding (LoI) with Lubei Chemicals in China. According to Metro, these agreements will cover the company`s entire bauxite production for the next two years and 90% of the expanded capacity planned for 2020 and 2021. The new mandatory contract between Metro Mining Ltd (ASX:MMI) with a large Chinese state-sponsored aluminium group represents a turnover of about 90% in 2019. Xinfa has extensive refining and bleaching work in Shandong, Shanxi, Guangxi and Xinjiang provinces, and Metro has entered into a mandatory four-year agreement to supply Xinfa with one million tonnes in the first year, followed by 2mtpa (million tonnes per year) for each of the next three years. Price fixing under the agreement is linked to an established index of alumina prices. Over the past 10 years, Australian bauxite has generally reached prices ranging from US$45 per tonne (CAF China) to US$55 per tonne. The project is moving bauxite from site to ship at an average rate of more than 7,000tpd (tonnes per day), and Metro Mining expects to reach our average of 10,000p by the end of June by 2018.

As noted below, the average bauxite price for China in the June quarter was $57.26 per wet ton (WMT). Stephen Everett, President of Metro Mining, said at the general meeting: „We shipped more than 2 million tonnes of leases in 2018 and announced an improved production forecast for this year at 3.5 million tonnes. The Xinfa Group, one of the largest integrated aluminium companies in China, delivers Bauxite. This agreement underscores the special interest of refineries in the inland provinces, where indigenous bauxite supplies have been hampered by recent mine closures and environmental audits. Mr. Argonaut recently expressed optimism about the offshore bauxite market, with analyst Matthew Keane stating that „alumina prices in northern China have recently reached several-month highs, with environmental shutdowns of domestic bauxi mining

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