Australian bauxite: Aluminium and beyond

By IM Staff
Published: Wednesday, 06 April 2016

Australia is the world’s largest producer of bauxite, with the majority used to produce alumina for the aluminium industry. Non-metallurgical applications such as refractories, proppants, building materials and pharmaceuticals make up around 10% of bauxite’s end uses, however, and many Australian miners are looking at ways to diversify.

By Cameron Perks

Bauxite, a mix of hydrated aluminium oxide minerals, including gibbsite, boehmite, diaspore and impurities such as silica, iron oxide and titanium-bearing minerals, is a key ingredient for a number of industries, including aluminium, refractoriesand ceramic proppants.

According to the US Geological Survey (USGS), Australiahosts 6.2bn tonnes bauxite reserves, the second largest in the world behind Guinea, which hosts some 7.4bn tonnes.

World bauxite reserves pie chart_USGS
Source: USGS 

Bauxite is the primary mineral source of alumina for aluminium. Between four and seven tonnes bauxite ore are needed to make two tonnes of alumina, which subsequently produces around one tonne of aluminium.

Bauxite is also used to produce alumina for non-metallurgical applications, which typically make up 10% of global end uses. These include water purification, refractory materials, pharmaceuticals, artificial marble, paper sizing, ceramics, abrasives, petroleum processing, plastic and flame retardants.

In addition to alumina, bauxite itself is used as a refractory material, in Portland cement, abrasives, mineral fibres, steel and calcium aluminate cements.

Bauxite applications

End use

Distribution (%)

Aluminium production

86

Non-metallurgical alumina

10

Refractories

0.9

Portland cement

0.7

Abrasives

0.7

Mineral fibres

0.7

Steel

0.3

Calcium aluminate cements

0.3

Other

0.4

 Source: Vicky Vassiliadou, Aluminium SA 
According to Chinese calcined bauxite supplier, Zhengzhou Sinocean Industrial Ltd, all of the refractory bauxite used in China, the biggest consumer of the material, is sourced domestically or from Guyana. 

Bauxite for refractory products can also be obtained from Russia, India and Brazil, however these sources ordinarily cannot meet strict quality specifications for refractories applications.

Typical industrial specifications for non-metallurgical bauxite *

Grade

Al2O3

SiO3

Fe2O3

TiO2

 

%

%

%

%

Abrasive

Min 55

Max 5

Max 6

Min 2.5

Chemical

Min 55-58

Max 5-12

Max 2

 

Refractory

Min 59-61

Max 1.5-5.5

Max 2

Max 2.5

* Most of the remainder represents water of crystallisation (loss on ignition, LOI) which is removed by calcination.

Source: Various

World bauxite and alumina flowchart**
 World bauxite and alumina flow chart_Richard Flook, Mosman Resources
**Based on 2014 figures
Source: Richard Flook, Mosman Resources 

Production

Before Indonesia introduced a ban on unprocessed metal ore exports in January 2014, the country was the world’s top supplier of metallurgical bauxite to China. The embargo was an attempt to force domestic miners to develop smelters that would add value to the country's resources and create jobs.

However, many companies, including bauxite miners, said building smelters was unfeasible in the absence of supporting infrastructure and export revenue. Indonesia’s income from mining has subsequently plummeted.

Miners have since turned elsewhere to meet demand from China. Malaysian bauxite production, for example, quadrupled to 962,799 tonnes in 2014 from 208,770 tonnes the year before, according to Malaysia’s Minerals and Geoscience Department.

Australia remains the world’s largest bauxite producer, with 81m tonnes mined in 2014. Total world production, according to the USGS, was 237m tonnes in 2014, which means Australia produced 35% of world supply that year.

Australia is also a substantial alumina producer, accounting for about 20% of world production – the bulk of which is exported to be smelted overseas. Around 19m tonnes of Australian alumina was exported to China in 2015, making it China’s largest supplier that year.  

Australian bauxite production 2015_USGS
Source: USGS 


In 2015, Australia produced about 50,000 tonnes fused alumina – a figure which has been relatively stable for the last 10 years but which is relatively small compared to China, which exports around 30,000-50,000 tpm.

Richard Flook, consultant at Australia-based Mosman Resources, believes consumption of bauxite in refractories, both directly and in brown fused alumina, accounted for around 18% of the total non-metallurgical bauxite market in 2015.

World refractories production was just over 35m tonnes last year, a reduction of nearly 4% compared to 2014, following the negative trend in Chinese steel output.

In 2013, about 25m tonnes bauxite residue from alumina refining was created in Australia. Reusing this material as a road base is becoming increasingly attractive, providing a secondary revenue stream for producers and resolving problem of disposing of the material, which can be costly.

Carbonated, fine-grained bauxite residue has been found to act as a substitute for agricultural lime in building materials by Australia-based Alumina Ltd. In areas in close proximity to bauxite deposits, raw bauxite ore has already been used as a road capping layer by many Australian councils and local governments.

Aluminium oxide exporters - at least 23% of Australia's exports go to China

Global aluminium oxide exporters
Source: OEC MIT

World non-metallurgical bauxite and alumina production (approx 13.2m tpa)

 World non-metallurgical bauxite and alumina production_Richard Flook, Mosman Resources
Source: Richard Flook, Mosman Resources 

Australian producers

The bulk of Australian bauxite production comes from the state of Western Australia, which accounts for 57.9% of the total volume, followed by Queensland, at 33.5%. The Northern Territory produced the remaining 8.6%.

There are just four companies in the industry, operating a total of six mines. Rio Tinto Plc is the largest producer, with 55.9% of market share by revenue, while Alcoa lies second, with 31.1%. South32 is the third largest Australian producer, with a market share of 12.9%, while Australia Bauxite Ltd in Tasmania is ranked fourth, with around 10%.

Rio Tinto

Rio Tinto mines bauxite from its Weipa mine in Queensland and the Gove project in the Northern Territory. Gove and Weipa are among the world’s highest grade bauxite deposits, with average grades of between 49% and 53% alumina, according to Geoscience Australia.

Bauxite mined at Weipa is sent 2,000km to Gladstone in northern Queensland, where it is refined at Rio’s Yarwun refinery and Queensland Alumina Ltd’s (QAL) refinery, of which Rio owns 80%.

The QAL refinery produces around 3.95m tpa smelter grade alumina, while output at Yarwun is approximately 2.2m tpa alumina, although it has the capacity to produce up to 3.4m tonnes.

Prior to 2008, Rio Tinto Aluminium produced up to 150,000 tpa calcined bauxite for abrasives and proppant agent applications, filing proppant patents in the 1980s as Comalco Aluminium Ltd. In the same year that Rio stopped producing non-metallurgical bauxite in Australia, US-based Carbo Ceramics Inc. switched from Australian bauxite imports to buying material from Guyana.

When Rio was supplying calcined bauxite from Weipa, typical grades supplied from the project were consistent with the following:

Chemical analysis of Weipa calcined bauxite

Alumina (Al2O3)

82-85%

Silica (SiO2)

6.5-7.3%

Iron Oxide (Fe2O3)

5.5-7%

Titania

3.1-3.7%

LOI

0.2-0.8%

Source:  Rio Tinto

Rio Tinto closed its refinery at Gove in May 2014 and now sends Gove bauxite directly overseas. In 2015, production from the site reached 7m tonnes, up from 6.5m tonnes in 2014.

Rio Tinto has demonstrated that Australian bauxite can used to make proppants. Given the high cost of importing frac sand into Australia from the US, along with rise of onshore gas activity in Australia, there could be opportunities for the development of bauxite-based ceramic proppants manufacturing locally.

Other Australian companies that have shown their readiness for proppant production include Minotaur Exploration Ltd and Coretrack Ltd. Minotaur was recently awarded a government grant to turn clays found at its exploration sites in southern Australia into ceramic proppants. Coretrack, meanwhile, is looking to make ceramic proppants from fly ash, using small amounts of bauxite.

Alcoa

Alcoa manages the Huntly and Willowdale mines in Western Australia as well as the Wagerup, Kwinana and Pinjarra refineries in the state. Ore from Huntly and Willowdale is refined to produce about 10m tpa alumina, which is then exported through ports at Bunbury and Kwinana.

The Kwinana refinery, with a capacity of 2.15m tpa, produces metallurgical alumina and a variety of speciality aluminas for various industrial and manufacturing applications, including water purification, refractory materials, pharmaceuticals, artificial marble and flame retardants.

Up until last year, Alcoa was one of two Australian producers of non-metallurgical alumina, sometimes called chemical grade alumina. However in 2014-15, Doral Fused Materials Pty Ltd shut down its Western Australia Rockingham fused alumina plant, which had been producing material for refractory, abrasive and ceramic applications. This left Alcoa as Australia’s only direct non-metallurgical alumina supplier.

Once bauxite is refined into alumina, it is harder to trace its movement through the supply chain to end uses. However, one company, China-based Lianyungang Zhong Ao Aluminum Co. Ltd, told IM that it uses Alcoa’s alumina in refractory, ceramic and glazing applications.

In 2003, Alcoa divested its speciality refractory, ceramic and polishing-application alumina business, now known as Almatis GmbH. Germany-headquartered Almatis now has around 550,000 tonnes speciality alumina sales.

South32

The Worsley alumina mine and refinery in Western Australia is a joint venture between South32 (86%), Japan Alumina Associates (Australia) Pty Ltd (10%) and Sojitz Alumina Pty Ltd (4%). The refinery has the capacity to produce 4.6m tpa metallurgical alumina.

Australian Bauxite Ltd

The Bald Hill mine in Tasmania, owned and operated by Australian Bauxite, contains 8.7m tonnes bauxite. Production currently stands at 40,000 tpa, however the company believes it can increase its capacity to 2m tpa by opening up additional bauxite operations in the state.

Room to grow?

Australian consultancy service, CM Group, estimated in May 2015 that China will produce 72m tpa alumina by 2025 and that Chinese domestic bauxite inventories have almost halved from about 40m tonnes in November 2013 to around 20m tonnes in November 2014. 

Chinese alumina production growth forecast

Chinese alumina production growth forecast_CM Group
Source: CM Group 

In August last year, CM Group forecast that China’s bauxite imports would rise from around 50m tonnes in 2015 to over 100m tonnes in 2025 – an increase attributed to higher shipments to Shanxi and Henan provinces. This could change supply dynamics in Australia, as Chinese companies assess the economics of refining domestically. In 2015, Alcoa sent trial shipments of unprocessed bauxite to overseas refineries to determine the potential for direct export.

Rio Tinto’s outgoing CEO, Sam Walsh, announced last year that he had signed off a $1.9bn South of Embley expansion project for the company’s Weipa operations. The project involves a staged increase in production to 50m tpa.

Australian Bauxite, meanwhile, holds additional bauxite tenements at Goulburn, New South Wales and Binjour, Queensland. The Goulburn tenements include the Taralga deposit, which has an inferred resource of 37.9m tonnes at an average grade of 39.2% Al2O3, with 53% of the resource suitable for direct shipping.

Queensland Bauxite Ltd holds more than 400km2 of bauxite prospective terrain in Queensland and lodged a formal Minerals Development Licence application in January for its South Johnstone project – a low silica, high iron (25-31% Fe2O3) bauxite resource, formed as a weathering horizon on basalts.

In China, work is being conducted to extract alumina and iron from high-iron bauxite deposits through a calcification-carbonisation method. Recent studies lead by Zhang Weiguang have shown that after the alumina and iron have been extracted, the final residues, consisting principally of calcium carbonate (CaCO3)and calcium silicate (CaSiO3) can be used directly in the cement industry.

Metro Mining Ltd hopes to mine up to 2m tpa from its Queensland Bauxite Hills project, which contains a 48.2m tonne high grade reserve (50.2% alumina and 6.3% reactive silica (SiO2)). The company recently announced its intention to raise $5.6m to fund the final stages of preparation for developing the site, including a definitive feasibility study.

The Urquhart bauxite project, located 5km southwest of Weipa, is jointly owned by Metallica Minerals Ltd (50%), through its subsidiary Oresome Australia, and China’s Ozore Resources (50%). The inferred mineral resource estimate for Urquhart, using a 45% Al2O3 cut-off, for direct shipping, stands at 7.5m tonnes bauxite at 51% Al2O3 and 16.3% SiO2 as of May 2015. The owners have lodged a Mining Lease Application for the project, which includes a proposed North Point Jetty load-out facility.

In the Northern Territory, both Alcoa and an indigenous-owned mining company, Gulkula Mining, are exploring for bauxite. Gulkula is exploring the Dhupuma Plateau with the intention of employing indigenous Australians on the project, if it is developed.

In Western Australia, Bauxite Resources Ltd holds licences for 396.5m tonnes bauxite resources grading at 40.2% Al2O3 and 2.4% SiO2. The company has completed a scoping study for mine and rail logistics for the Fortuna deposit, which contains 40.2m tonnes bauxite.

Australia's bauxite deposits, alumina refineries and aluminium smelters

Australian bauxite map_Geoscience Australia 
Source: Geoscience Australia 



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