Australian Bauxite enters into third bauxite marketplace with sale from Bald Hill

THE BOURSE WHISPERER: Australian Bauxite (ASX: ABX) has diversified its bauxite market share by moving into the fertiliser and cement markets.

Australian Bauxite (ABx) announced its maiden sale, with shipping dates locked-in, of bauxite into the fertiliser and cement markets at prices, it claims to be, considerably higher than the currently over-supplied metallurgical bauxite market.

The sale comes from the company’s Bald Hill mine in Tasmania – the first new bauxite project to be developed in Australia for more than 35 years.

This maiden Bald Hill sale is for cement-grade bauxite, with shipping dates to start from 18 April for an initial despatch of 5,000 tonnes for immediate use in the last week of April.

ABx indicated the customer is already putting its hand up for a second, larger shipment of 30,000 to 40,000 tonnes once stockpile sites in the receiving port are approved.

The company anticipates this to occur within two months.

“This is a significant step forward by ABx and is just reward for our supportive shareholders, brokers and advisers,” Australian Bauxite CEO Ian Levy said in the company’s announcement to the Australian Securities Exchange.

“These sales are part of a resilient marketing plan developed by COO, Leon Hawker and Logistics Manager, Paul Glover.

“ABx conducted test work during 2014 and 2015 to achieve cement and fertiliser industry technical specifications and can now sell into all three bauxite markets at the best prices and terms available.

“This sale into the cement market delivers our budgeted profit margin in stark contrast to the metallurgical market which is suffering from short-term weakness.”

ABx and its marketing partner RawMin are continuing negotiations with metallurgical and cement-grade bauxite customers in China, India and the Middle East.

RawMin has sold its own bauxite into these markets for three decades and has introduced ABx to several customers that require specialised bauxite, especially in the Middle East.