Bauxite

Content maintained by Paul Kay

• Bauxite
• Resources
• Accessible EDR
• JORC Reserves
• Exploration
• Production
• World Ranking
• Industry Developments

Bauxite is the main raw material used in the commercial production of alumina (Al₂O₃) and aluminium metal globally, although some clays and other materials can be utilised to produce alumina. Bauxite is a heterogeneous naturally occurring material of varying composition that is relatively rich in aluminium. The principal minerals in bauxite are gibbsite (Al₂O₃.3H₂O), boehmite (Al₂O₃.H₂O) and diaspore, which has the same composition as boehmite, but is denser and harder.

Australia is the world's largest producer of bauxite, representing 33% of global production in 2010. The bauxite resources at Weipa in Queensland (Qld) and Gove in the Northern Territory (NT) have almost 50% available alumina and are amongst the world's highest grade deposits. Other deposits located in Western Australia's (WA) Darling Range, Mitchell Plateau and Cape Bougainville, the latter two of which have not been developed, are relatively low grade at around 30% available alumina.

More than 85% of the bauxite mined globally is converted to alumina for the production of aluminium metal. An additional 10% goes to non-metal uses in various forms of specialty alumina, while the remainder is used for non-metallurgical bauxite applications. In most commercial operations, alumina is extracted (refined) from bauxite by a wet chemical caustic leach process known as the Bayer process. Alumina is smelted using the Hall-Heroult process to produce aluminium metal by electrolytic reduction in a molten bath of natural or synthetic cryolite (NaAlF₆).

Australia's aluminium industry is a highly integrated sector of mining, refining, smelting and semi-fabrication centres and is of major economic importance nationally and globally. The industry consists of five long term bauxite mines, seven alumina refineries, six primary aluminium smelters, 12 extrusion mills and two rolled product (sheet, plate and foil) mills. The industry in Australia is geared to serve world demand for alumina and aluminium with more than 80% of production exported. Transport, packaging, building and construction provide much of the demand for the metal in Australia.

The long-term future of Australia's aluminium industry is underpinned by vast resources of bauxite located in the Weipa and Gove regions adjacent to the Gulf of Carpentaria in the NT, and the Darling Range south of Perth, WA. Deposits in these regions rank among the world's largest identified resources in terms of extractable alumina content. The undeveloped bauxite deposits at Mitchell Plateau and Cape Bougainville in northern WA are not currently economic to develop, but are a significant potential future resource.

Economic Demonstrated Resources (EDR) of 6.2 gigatonnes (Gt) in 2009 remained consistent with the previous year. The nett change in overall demonstrated resources was limited, with additions resulting from exploration and resource estimation drilling being offset by depletions created through mine production.

About 95% of bauxite EDR is currently accessible for mining. Some areas within mining leases in the Darling Range in WA, in particular, are not available for extraction for environmental reasons. The ratio of Accessible Economic Demonstrated Resources (AEDR) to current mine production shows the resource life of existing bauxite operations is around 70 years. The potential exists for further mineral exploration and reserve delineation to extend the current resource life estimate, particularly in the vicinity of existing operations.

Approximately 41% of AEDR comprises Joint Ore Reserve Committee (JORC) Code ore reserves as reported by industry. The remaining represents resources assessed by Geoscience Australia as being economically recoverable from measured and indicated categories of mineral resources, as defined under the JORC Code and other classification systems used by companies not listed on the Australian Securities Exchange. The surface expression of bauxite and confidence in lateral continuity of thickness and grade make it possible in certain terrains to classify some Inferred Resources as EDR.

Data on exploration for bauxite specifically are not available nationally. Because of the scale of existing known resources, much of the exploration effort for bauxite is directed at extending brownfields occurrences close to existing infrastructure.

Australia was the leading producer of bauxite and alumina globally in 2010 and the fifth largest aluminium producer, with increased export volume and value recorded during the year, especially for bauxite. Based on Australian Bureau of Agricultural and Resource Economics and Sciences data, production totalled 68 million tonnes (Mt) of bauxite (33% of global production), 20Mt of alumina (25% of global) and 1.9Mt of aluminium (5% of global). The export value of each commodity for 2010 was bauxite $205million, alumina $5232million and aluminium $4172million, leading to a total export value of $9608million.

The economic significance of value adding or first stage manufacturing to secure enhanced export value is demonstrated through the high values compared to lower volumes for alumina and especially aluminium, and the large volume and relatively small value for bauxite.

Based on United States Geological Survey (USGS) data for other countries, Australia’s demonstrated bauxite resources of 6Gt rank second in the world after the Republic of Guinea, and ahead of Brazil, Vietnam, Jamaica and India.

Aluminium is a product of increasing importance for manufacturing because of its light weight, strength, durability and resistance to corrosion, as well as its capacity to be recycled. On a life cycle assessment basis, the high strength to weight ratio of aluminium results in significant fuel savings, particularly where substitution can be made for heavier transport related construction materials. The energy intensity of the aluminium industry is high, with electricity accounting for around 30% of total operating costs for aluminium production. As a result, changes in the price of energy have a direct and immediate impact on the profitability of aluminium production.

The expansion of Australian bauxite and alumina production in the past few years reflects high demand for the commodities, with significant investments being undertaken in planned and prospective projects.

Rio Tinto Alcan progressed feasibility studies into the expansion of the Weipa (Qld) bauxite production operations South of the Embley River in 2010, including the potential construction of a new beneficiation plant, ship loading facilities and a power station. Depleted bauxite reserves at the Andoom and East Weipa operations would be replaced on a staged basis by production from South of the Embley River, which would extend the Weipa mine life by 40 years. The project has been referred under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and an Environmental Impact Statement (EIS) will be prepared following government and public comment. Pending approvals, construction could commence as early as 2012.

At Gove in May 2011, following a $700million agreement with the Northern Land Council and traditional owners, Rio Tinto secured a 42 year extension of the leases covering the company's bauxite mining and alumina refining operations.

BHP Billiton completed the budget and schedule review for its Worsley Efficiency and Growth (E&G) project in June 2011, reflecting a complex project constrained within the existing footprint of the facility. Once completed, the E&G project will leave the Worsley alumina refinery in WA's Darling Ranges with a capacity of 4.6 million tonnes per annum (Mtpa), up from the existing 3.5Mtpa capacity.

The Wenlock River Basin on Cape York was declared a wild river in June 2010 under the Queensland Government's Wild River Legislation, leading to a review of the Pisolite Hills bauxite proposal by Cape Alumina. The company found that the buffer restrictions imposed through the legislation rendered the proposal uneconomic, but planned to complete an EIS and lobby for further government consideration.

Along with the well developed production areas around Weipa (Qld), Gove (NT) and the Darling Range (WA), bauxite occurrences on the Mitchell Plateau and Cape Bougainville (WA), Cape York (Qld), central New South Wales and Tasmania maintained sector interest. Independent bauxite development companies have moved forward with a number of projects on Australia's east and west coasts, particularly for direct shipping bauxite ore from areas close to existing infrastructure.