By Alison Saxby,
Roskill Information Services Ltd
Recent press reports have quoted a
leading consumer as describing high-grade bauxite as “a
rare commodity in China”.
Global abrasives markets are currently depressed (see
pp56-59), and refractories demand is relatively flat, so
any supply shortfalls of raw materials are not being keenly
felt. However, should markets such as refractories start to
recover, then supply issues could begin to pinch in two to
three years’ time, particularly in North America and
Europe.
A new bauxite project under
development in Guyana could fill the gap, and other
developments in Guyana, Russia, India and Brazil could also
provide some of the answers. But what is in the pipeline in the
short term for calcined bauxite supply?
China has dominated the supply of
calcined bauxite for the refectories and abrasive industries
during the past two decades. But there has been a notable
decline in exports since 2005, resulting in exports of 611,000
tonnes of calcined bauxite in 2012, a figure which also
includes fireclay and chamottes. This is now about half the
export volume of 1.25m tpa seen in 2005 (see Figure
1). Following the spike in 2009, average export values
have also declined, but are still much higher than historic
levels. Although the economic situation is playing a major part
in the depressed export levels, the decline raises questions
about the future supply of Chinese calcined bauxite and whether
production levels could be increased to meet future
demand.
Guyana - new high-grade production in 2014?
A significant portion of the
bauxite mined in Guyana is used in the production of
refractories and aluminium chemicals, mainly because of its low
iron content, and virtually all production is exported,
predominantly to the US and Europe. The mining industry is
vital to the Guyanese economy, and a government priority is to
facilitate growth for the mining industry. To this end, the
government is constructing much-needed infrastructure in mining
areas.
Taking advantage of this favourable
climate for mining companies, First Bauxite is aiming to be a
new significant supplier of refractory-grade bauxite from its
project in Bonasika. The Canadian company is scheduled to start
construction in 2013 and to commission the plant in 2014, with
full commercial production commencing in 2015. Total investment
in the project will be $161m, and the whole project is being
carried out in a phased approach.
A report in November 2011 gave the
company a total NI 43-101 compliant resource of 13.089m tonnes
and mineable reserves of 11.098m tonnes, grading 57.7%
Al2O3, 8.9% SiO2, 2.3%
TiO2, 1.19% Fe2O3 and 29.1%
LOI from the seven Bonasika deposits. The mine plan calls for
8.6m tonnes of these to be mined during 36 years.
Mining will begin at the Bonasika 7
deposit, which has a mine life of 22 years. The wash plant and
sinter plant will be located at Sand Hills, on the west bank of
the Demerara River. The deposit is located 26 km from a river,
and 45 km upstream from the capital, Georgetown.
The 300,000 tpa mine and operation
will produce dry raw bauxite, and then a wash plant will
produce “an engineered bauxite feed” at a production
rate of 162,000 tpa. This will be fed to two vertical
pressurised shaft kilns at the sintering plant, which will
produce 100,000 tpa of high-quality calcined refractory
bauxite. The sintered bauxite finished product will be marketed
under the registered trademark Guysin. Exports will be aimed
mainly at North American and European markets, and the company
already has arrangements in place with potential buyers.
First Bauxite holds two other
projects in Guyana, and will be carrying out exploration at
both of them in 2013. The first, Essequibo-Demerara PGGS, was a
metallurgical bauxite joint venture with Rio Tinto Alcan, which
terminated in February 2011. First Bauxite acquired the
Tarakuli deposit in 2010. Tarakuli is located 15km from the
Guyanese-Suriname border and 90km east of UC Rusal’s
Aroaima-Kwakwani mines. Half the tonnage at the deposit is
classified as metallurgical and half as chemical-grade
bauxite.
Chinese company Bosai Minerals is
an established key producer of refractory-grade bauxite from
its mines at Linden, Guyana, and has reserves of 186m tonnes.
Production of calcined bauxite is in the order of 250,000 tpa
and the company also produces another 150,000 tonnes of
chemical and cement bauxite grades. Production levels suffered
in 2012 owing to a period of unrest in Linden, and the mine and
plant were closed for around a month, reducing production
levels by around 20,000 tonnes. Since then, Bosai has
reaffirmed its commitment to producing bauxite and investment
in Guyana.
Bosai plans to invest $100m during
the next five years to expand the mine capacity to increase
bauxite production to 2m tpa. It is currently unclear how much
of this will be high-grade material for calcination and how
much will be metallurgical, but the Guyanese Ministry of
Natural Resource and Environmental Protection of Guyana sold
the licence to Bosai for prospecting and exploiting bauxite in
the No.37 mineral region, which has proven resources of more
than 70m tonnes of high-quality bauxite. The upgrade includes
an expansion to mining capacity and the installation of a new
calcination kiln, as well as the improvement of environmental
protection systems.
Timan - on
track
A relatively new development is the
production of a low-iron bauxite or refractory-grade bauxite by
UC Rusal in north-east Ukhta, Republic of Komi, Russia, through
its Timan Bauxite subsidiary. The bauxite will contain less
than 4% Fe2O3 in calcined material.
Production began in 2012 with an initial expected output of
90,000 tonnes. Full production of 250,000 tpa is expected to be
reached in 2013.
The bauxite is extracted by
open-cut mining at the Middle Timan bauxite deposit. This is a
departure for the mine, which also produces some 1.9m tonnes of
metallurgical grade ore. Total bauxite production from Timan
increased to 2.112m tonnes in 2012 from 2.03m tonnes in 2011.
The company says it already has a number of agreements in place
with prospective buyers, although Rusal is considering
calcination of the bauxite at its Boksitogorsk alumina
refinery, Leningrad Oblast, for direct use in the domestic
refractories industry.
Rusal is also planning to sell the
low-iron bauxite to ceramic proppant manufacturers, used in the
oil and gas industry, and already has off-take deals with two
proppants plants in Russia.
SOBR - increasing
production since 2009
Severo-Onezhsky Bauxite Mine (SOBR)
is another refractory-grade bauxite producer in Russia. The
company is located in the Arkhangelsk Region (Plesetsk
district) and exploits the west area of Belovodskaya field of
the Iksinsky deposit. SOBR mainly supplies refractory- and
cement-grade bauxite and refractory clays. Production levels to
390,000 tonnes in 2011 from 270,000 tonnes in 2009, with 2012
anticipated to be similar to 2011. Output serves the domestic
market.
New mine in Brazil for
Varginha
Minera‹o Varginha is a
bauxite producer with mines in Pocos de Caldas (MG) and two
bauxite processing facilities, one in Fazenda Varginha Andradas
and the other in Eletro Varginha Caldas, both in Minas Gerais.
Bauxite reserves are 40m tonnes. The company is investing R$23m
($12m) in a new mine in the region of Manhuau/Cataguazes
to produce an additional 50,000 tonnes of washed bauxite.
Varginha’s total bauxite production in 2011 was 310,000
tonnes, along with 100,000 tonnes of manganese and 120,000
tonnes of clays.
High-grade bauxite is produced from
the mines at Pocos de Caldas and then calcined in rotary kilns
at the plant in Electro Varginha. The calcined bauxite is
mainly used for the production of brown and white fused alumina
(total capacity 3,000 tpa). The company also produces aluminium
sulphate for water treatment and activated aluminas and
chamottes.
Imerys - Brazilian
purchase
Imerys SA acquired Vale’s MSL
refractory bauxite deposit in Para State, Brazil, at the end of
2012 through its subsidiary, Treibacher do Brazil. MSL owns
bauxite mining rights in Monte Dourado, Brazil, and until the
end of 2003 the company produced refractory-grade bauxite,
mainly for export markets. In the 1990s, MSL had capacity to
produce 150,000 tpa of calcined bauxite from its operations at
Caracuru, Almerim region, Para State. While Imerys has not made
any comment about its plans after the acquisition, it is highly
likely that the company is looking to secure supply for its
subsidiaries for proppant, refractories and brown fused alumina
(BFA) production.
Indian producers - some
captive production
In India, Ashapura Minechem, part
of the privately owned Ashapura Group of Industries, is now one
of the country’s largest producers and exporters of
bauxite. The company mines deposits of gibbsitic bauxite at
Kutch and Jamnagar in Gujarat and Western Ghats in
Maharashtra.
Calcined bauxite capacity is 66,000
tpa from three rotary kilns at its operation in Jam-Khambaliya,
Saurashtra region. The calcined bauxite has an alumina content
of 86-87%, with the majority consumed in the domestic
refractories industry and other applications include proppants,
cement, chemicals and abrasives. In 2012, the company expressed
an interest in state-owned Gujarat Mineral Development Company
(GMDC)’s 50,000 tpa calcination plant, which was put out
for tender (IM 23 November 2012). This extra
capacity, if acquired, would increase significantly its share
of the calcined bauxite production in India.
GMD mines low-grade,
non-metallurgical bauxite at Bhatia in the Saurashtra district
of Gujarat, and high-grade material at Ratadia in Kachchh
district. The Ratadia mine provided high-grade material for the
company’s 50,000 tpa Gadhsisa bauxite calcination plant in
the Kachchh District, in Gujarat, which is the largest single
rotary kiln bauxite calcination plant in India. The plant was
refurbished in 2007, although it closed at the beginning of
2010 because of there was no “plant-grade” bauxite
available as feed. Sales of calcined bauxite in FY 2009-2010
were 18,000 tonnes, which fell to 5,000 tonnes in 2010-2011, as
stocks were sold.
Orient Abrasives Limited (OAL),
headquartered in Delhi, is one of India’s largest
manufacturers of calcined bauxite and fused alumina products
from its plant in Porbandar, Gujarat. Raw bauxite is sourced
from the company’s mines in the Jamnagar and Bhuj
districts in Gujarat district and calcined alumina purchased
from outside alumina refineries.
Production capacity is 74,000 tpa
of calcined bauxite. The company increased its installed
capacity of fused alumina grains in 2012 to 36,000 tpa and is
setting up a lignite-based power plant to replace its fuel-oil
fired units. Again, because of the company’s production of
fused alumina, all calcined bauxite production is consumed
captively.
Carborundum Universal Ltd (CUMI),
part of the Murugappa Group of India, supplies all types of
abrasives including BFA and calcined bauxite for refractory
markets. The company mines bauxite from the Bhatia mine in
Jamnagar district, Gujarat, for use as feedstock in the
production of fused alumina. It operates a calcined bauxite
plant at Okha with a capacity of 33,000 tpa, which is used
captively for its own BFA production.
CUMI signed a memorandum of understanding (MoU) with GMDC in
2010 to develop a BFA plant in Kutch, Gujarat. Initial
production at the plant will be 35,000 tpa. Gujarat already
operates abrasive-grade bauxite mines and has a calcination
plant (currently idled) and available supply, whereas CUMI
already has the expertise in a wide range of BFA products. No
further developments on this project have been reported.
A tender was put out for the sale
of the plant equipment but, at the end of 2012, the calcination
plant was still under GMDC’s ownership. The company is
planning to increase bauxite production in 2013 by acquiring
new areas. It is not clear whether this new production will be
suitable for feedstock for the calcination plant.
Saurashtra Calcined Bauxite &
Allied Industries has a capacity for calcined bauxite of 24,000
tpa from two plants in Porbandar and in Bhatia, Jamnagar.
However, the company reports that it has been investing in its
operations and is aiming at production levels closer to 60,000
tpa of bauxite. The company supplies refractor and abrasive
calcined bauxite to the domestic and export markets.
Also in India, the Central Glass
and Ceramic Research Group (CGCR) in Nagpur has developed a
process to convert extremely low grades of bauxite into
refractory-grade bauxite. Laboratory tests have shown good
results, and refractory companies have already offered to scale
the process up to 1 tonne capacity, according to CSGR. The
process is based on the removal of impurities including calcium
oxide, titanium oxide and iron oxide from the bauxite, using
natural materials to absorb them, to create a bauxite suitable
for use in refractories.
Developments in
China
China is still the world leader in
production of high-grade calcined bauxite, with both refractory
and abrasive grades serving a large domestic market and
dominating international supply. However, the industry
structure is changing. Chinese exports of calcined bauxite,
including fireclay and chamottes, fell to 611,000 tonnes in
2012 from 650,000 tonnes in 2011. This has opened the way for
other bauxite producers elsewhere in the world and other
high-alumina products to be reconsidered, perhaps reversing a
20-year trend where Chinese refractory bauxite was the dominant
material.
The lifting of the Chinese quota
and licence systems on calcined bauxite at the end of 2012 will
probably not make too much of a difference to the volume of
bauxite exports in the short term. However, it is likely that
the Chinese government will still influence export trends
indirectly, either by placing restrictions on mining, or adding
resource taxes to increase prices. What may have more of an
influence could be the fact that production costs are rising in
China, including bauxite ore and energy prices, which mean that
profit margins are slimmer than in the past.
Five years ago, calcined bauxite
exports originated from the provinces of Shanxi (60-70%) and
Guizhou (30-40%), with other provinces supplying the domestic
market. There were 15 distinct significant producers of bauxite
suitable for calcining. However, following the huge upsurge in
demand to feed the country’s aluminium production, driven
by the Chinese government desire to develop its aluminium
capacity, higher-grade bauxite has been diverted to produce
alumina. Since 2003, the legal right to mine bauxite has almost
exclusively been allocated to Chinese domestic smelter-grade
alumina producers. This has led to the situation where there
are relatively few mines solely mining for refractory and/or
abrasive grades of material.
As part of the consolidation of
bauxite mining allocation towards metallurgical-grade
production, there has been a legislative process to close all
illegal bauxite mines, and private, small- and medium-scale
mines. This is leading to regional shortages of high-grade ore
for some calcined-grade producers, particularly in Shanxi
Province in early 2013, following on from the fourth quarter of
2012.
These producers will be further
squeezed if new environmental legislation is bought in. Latest
reports from China suggest that the government is collecting
public comments on its proposals on the refractories
industry’s sustainable developments. Included within this
are proposals that all rotary kilns with a single production
line will have to a minimum capacity of 30,000 tpa and energy
consumption higher than 240kg of standard coal per tonne of
calcined bauxite. Tunnel kilns with single-line production
capacity lower than 20,000 tpa and a coal consumption of
greater than 285kg per tonne of calcined bauxite will be closed
by 2015.
Bosai Minerals
Privately owned Bosai Minerals
Group, based in Chongqing, has grown in recent years, and now
in addition to its Chinese bauxite mines and refineries, the
group has operations in Guyana and a major metallurgical
bauxite and alumina project in Ghana. The company is
particularly known for its refractory-grade bauxite production
and is also the second-largest producer of BFA in the world and
the largest in China. However, Bosai is a value-added producer
in that it supplies fused alumina to the international market
rather than calcined bauxite for abrasive or refractory
applications.
The group operates three
abrasive-grade bauxite mines in China in Kaiyang, Guizhou
Province and Pingguo in Guangxi Province, with total reserves
of more than 20m tonnes, and much of its abrasive-grade bauxite
production is used in-house to supply its BFA operations. Total
capacity of Bosai’s BFA, including its recently announced
fourth plant, is 235,000 tpa. In 2012, Bosai also invested
Yuan2.2bn ($350m) in two projects, including a high-quality
grinding plant to supply abrasive materials for use in
machinery and high-precision instruments, and another to supply
proppants.
CMP Xiuwen
CMP Xiuwen, owned by China Mineral
Processing UK Ltd, purchased the Xiuwen Mine in Guizhou in
March 2011 in order to secure supply for its own calcining
operations and bauxite requirements. The operation consists of
open-pit mining and a single adit, which will initially be used
to produce 100-200,000 tpa non-met bauxite. The operation
previously produced both refractory and abrasive grades of
bauxite. CMP is also looking to produce proppant and ceramic
ball bauxite grades, with production capacity of 20,000 tpa and
30,000 tpa respectively (IM 24 May 2012).
Huang He
Minerals
Huang He Minerals Co Ltd mines and
calcines bauxite and produces BFA at Yima, Henan Province. The
company also operates a 70,000 tpa mineral processing plant in
Tianjin and completed a new refractory premix plant in 2011,
which will have a total capacity of 45,000 tpa from three
premix machines. The plant is 5 km from Xingang and produces
mainly bauxite, fused alumina and silicon carbide. Again, the
company uses its bauxite in-house.
Summary
Calcined bauxite supply will be a
mineral to watch over the next few years. If, and when, the
markets begin to recover, demand will rise. Among a handful of
expansions and new projects reviewed here, much is destined for
in-house and domestic consumption, particularly in India,
Brazil and Russia. Whether supply will match demand depends on
developments in China and Guyana, which remain the key to
supply for both refractory and abrasive grades, and the major
influence in the marketplace.
Contributor: Alison Saxby is a director and
manager industrial minerals research for Roskill Information
Services. Roskill has recently published its 8th
Bauxite and Alumina Global Industry and Market Outlook.