Metro Mining plans to start construction of its Bauxite Hills mine north of Weipa in July, with first shipment scheduled for April next year.
Metro today released a bankable feasibility study on the planned operation, which it says highlights the benefits gained through its acquisition of Gulf Alumina Limited late last year.
Bauxite Hills is expected to cost $35.8 million to bring into production and employ up to 200 people once operational, with a 30 per cent indigenous workforce target.
Based on the combined Metro and Gulf projects, the bankable feasibility study has determined enhanced reserves of 92 million tonnes and resources of 145Mt, with a 17-year initial mine life.
The company says existing environmental approvals and mining leases for the Gulf component of the project allow early works to commence, with final environmental approvals expected by mid-year.
Basic infrastructure including airstrip, haul roads, camp and port location are already in place.
“Once approvals are finalised we plan to commence mining at 2 million tonnes per annum increasing to 6Mtpa over the first four years,” Metro managing director Simon Finnis said.
“Whilst the BFS has been completed for steady state production of 6Mtpa, environmental approvals should allow production of up to 10Mtpa. We will continue to evaluate the benefits of increasing production as we move through the pre-development and operational phases.
“The BFS estimates life-of-mine revenue of $5.7 billion and life-of-mine earnings before interest, tax depreciation and amortisation of $2.5 billion.”
He said the feasibility study, which was completed by MEC Mining, was supported by a report from commodity research specialists CM Group which said total bauxite imports into China were forecast to increase from an estimated 52 million tonnes in 2016 (of which 21.3 million tonnes came from Australia) to 136 million tonnes in 2026.
“The BFS confirms we have a significant, long-life, low capital-cost and high-margin Australian bauxite project,” Mr Finnis said.
Metro has secured a binding offtake agreement with China’s Xinfa Group for 7Mt of bauxite to be delivered over the initial four years of mining.
Metro’s total tenement package on Cape York covers 2505sq km.