Bauxite & Aluminium

The Future for Bauxite

From 2004 to 2012, global aluminium consumption increased by over 6%.  Current projections are that this growth will continue at 6.9% per annum until 2030. Global bauxite consumption in 2012 was 225 million tonnes.  Analysts forecast around +20Mt Aluminum per annum by 2020 and an extra 110 Mt Bauxite. To put this into context, the two largest bauxite mines in the world each produce 20Mtpa. The third largest producer is CBG in Guinea which produces about 14Mtpa.

 

Most major mines are experiencing resource depletion and increasing environmental constraints.   Existing capacity and current alumina plant expansions will be sufficient to meet market needs for the next 12 to 18 months but substantial new refining capacity and bauxite supplies will be required after 2015.

 

As with most resources, China’s appetite for bauxite is growing at an unprecedented rate.  Chinese bauxite imports increased from just under 2 Mtpa in 2005, to over 60Mt in 2013. Most [75%] of this increase in the Chinese demand for bauxite was sourced from Indonesia until the Indonesians introduced a ban on the export of 14 unprocessed raw materials, including bauxite, from 2014*.

 

The intensity of global aluminium use is growing and will remain strong over the medium to long term. The per capita intensity of aluminium use in India is approximately 1kg per annum. In Brazil this rises to about 5kg, and the average for the non-industrialised / emerging markets is just below 10kg. In the industrialised world, per capita aluminium consumption is between 25kg and 32kg per annum. The split in aluminium consumption between the industrialised nations of Europe, North America and Japan, and the emerging markets of China, Asia, Africa and Latin America is 49% to 52%.

 

Commodity analysts see strong parallels between the ramp up of iron ore/steel production some years ago and the current growth in the aluminium industry. At one-third the mass of steel, aluminium has a huge strength to weight advantage. Add to that the many other sought after characteristics of aluminium and it is easy to see that it, and its supply chain from resource to end-user, has a strong future.

 

* In March 2012 Indonesia

announced a ban on the export

of 14 unprocessed raw materials,

including bauxite, from 2014.

Bauxite Market: Key Facts

  • Positive outlook for the bauxite market driven by growing aluminium consumption in the developing countries (China, India, Latin America)
  • World market for metallurgical bauxite (2010) 220.3 million tonnes
  • Strong aluminium consumption growth projected at 6.9% per annum from 2011 to 2030, i.e. an increase of some 50% by 2020
  • Market is forecast to require 15Mt of new bauxite supply year-on-year, the equivalent of Guinea’s current annual exports
  • Major shift from integrated production to independent suppliers
  • Tradeable bauxite consumption of 106Mt in 2010, projected to reach 153Mt by 2020
  • Bauxite production capacity forecast to move into deficit by 2015
  • Largest reserves are in Guinea (est. 7.4Bn t) and Australia (est.5.7 Bn t)
  • Guinea hosts the highest “premium” quality ore
  • Current bauxite price FOB Conakry between US$35/t and US$40/t
  • Bauxite prices forecast to range from US$50/t to US$65/t by 2020

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Republic of Ireland

 

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Republique de Guinée

 

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48 Dover Street

London, United Kingdom

W1S 4FF

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