PERTH (miningweekly.com) – Bauxite miner Metro Mining on Friday announced that it would bring forward its wet-season shutdown at the Bauxite Hills mine, in Cape York, as the company failed to secure offtake for the remainder of the year.
Mining is starting to wind down and shipping will cease around September 15, the company told shareholders, while operations are expected to restart in April next year, when deliveries into the existing contract with offtaker Xinfa will restart.
Metro has already contracted 2.3-million tonnes of production for 2021.
“We are extremely disappointed that despite a record performance from the team on site, and the effort of our marketing team, we have been unable to secure further sales that would have meant a very successful operating year for Metro,” said MD and CEO Simon Finnis.
“We live in very challenging times with many factors outside of our control. This decision has not been taken lightly, and we will do all we can to assist our people and all stakeholders. This includes ongoing discussions with both federal and state governments,” Finnis said.
He noted that negotiations for bauxite sales for the remainder of 2020 were also ongoing, and if additional sales were secured, the company could reopen the operation later in the year.
“The market does appear to be recovering and our marketing efforts are continuing as aggressively as ever in order to secure additional sales for this and the following years. However, we also have the responsibility to protect the interest of our shareholders and all stakeholders, so the decision to accelerate the move into the wet season shutdown had to be made.”
The earlier than normal closure will result in a number of staff and contractor redundancies, with only a small crew remaining on site for general maintenance.
Meanwhile, Finnis noted that the Stage 2 expansion of Bauxite Hills remained the core strategy for the project’s long-term development. However, he noted that the timing for the formal commitment to the Stage 2 development would be influenced by the uncertainty over the outlook for global growth and the impact of the Covid-19 pandemic.
He noted that while there have been recent improvements in macro conditions, general confidence in the sector remains low and customers were reluctant to enter into new offtake agreements.