PERTH (miningweekly.com) – Bauxite developer Metro Mining has signed an offtake memorandum of understanding (MoU) with Chinese aluminium firm Xinfa Group over the Bauxite Hills project, in Queensland’s Cape York peninsula.
The MoU contemplated an offtake of between 1-million and 1.2-million tonnes a year of bauxite, over an initial five-year term.
The offtake represented around half of the planned yearly production at the Bauxite Hills project.
Pricing for the offtake was yet to be determined and would be subject to market conditions and bauxite quality, while yearly shipping schedules would also be agreed on in advance.
Metro CEO Simon Finnis said on Monday that the MoU showed the strong relationship and good faith between Metro and Xinfa.
It was expected that an offtake agreement would be executed within four months.
A February feasibility study estimated that the Bauxite Hills mine would deliver some two-million tonnes a year of direct shipping ore (DSO) product, over a mine life of 21 years.
The DSO operation was expected to require a capital investment of only A$27.4-million and would deliver an internal rate of return of 88% and a net present value after tax of A$197-million.
Finnis said Metro’s focus would now be on completing a definitive feasibility study for the project, as well as achieving permitting approvals, undertaking predevelopment work and finalising the formal and binding offtake agreements.