Cape Alumina increases total Cape York bauxite Resource
THE BOURSE WHISPERER: Cape Alumina (ASX:CBX) has increased the total mineral resources across its suite of projects located on western Cape York, Queensland, to 202.4 million tonnes of high-quality, export-grade bauxite.
Cape Alumina’s tenements on western Cape York, Queensland. Source: Company announcement
The company had previously estimated a Measured, Indicated and Inferred Resource totalling 134.6Mt of bauxite at its Pisolite Hills integrated mine and port project, which was recently declared a ‘significant project’ by the Queensland Government.
In February, Cape Alumina released results of a 2011 dry-season exploration program conducted at its Bauxite Hills integrated mine and port project for plateaux BH1, BH2, BH6, which enabled the estimation of an Inferred Resource of 60.2Mt of bauxite.
An additional Inferred Resource of 3.8Mt of bauxite has been estimated for the BH4 and BH5 plateaux in the Bauxite Hills project area.
The company said its exploration program has also enabled it to estimate an Inferred Resource of 3.8Mt of bauxite at the Hey Point project area, which is adjacent to Rio Tinto Alcan’s South of Embley project.
A concept study dealing with the mining of the Hey Point resource has previously been completed and further studies are planned for this project.
These include investigations of a 0.5 million tonnes per annum mine, with a five year life, producing dry-screened, and export-grade bauxite.
Work at other Cape Alumina tenements on western Cape York is ongoing, which the company said is expected to further increase its resource base.
“We have just completed an exploration program at our Vrilya tenements and intend to advance projects in this and other areas in the future,” Cape Alumina managing director Graeme Sherlock, said in the company’s announcement to the Australian Securities Exchange.
“The recent results also show that we are on track to reach our overall exploration target of 300 to 400 million tonnes of bauxite resources within the western Cape York bauxite province.”
Sherlock said global demand for bauxite is expected to increase in the coming years and that Cape Alumina is uniquely positioned to meet market needs.
He used China as an example indicating its position as the world’s largest alumina producer and consumer that is short in bauxite due to the rate it is being consumed in the country.
Adding to China’s bauxite woes is its biggest external provider of bauxite, Indonesia taking the decision to legislate to ban bauxite exports from 2014 to encourage value adding down-stream processing in Indonesia.
“As a result, there is likely to be growing pressure on bauxite imports into China, which could lead to higher bauxite prices, and Chinese alumina producers are seeking a reliable, alternative, long-term supply of high-quality bauxite,” Sherlock said.
“A similar supply-demand dynamic occurred in the Australian coal and iron ore industries over the past ten years.
“We believe that western Cape York will become China’s preferred source of bauxite.
“Cape Alumina is uniquely positioned to meet this demand.”