BAUXITE & ALUMINA CONF: Raw material supply relies on good community, gov relationships, execs say

There is no concern over the availability of bauxite to meet ongoing aluminium supply chain growth, industry executives said at Fastmarkets’ 25th Bauxite & Alumina conference in Miami on Tuesday March 26, noting that the key is improving community and government relationships to ensure access to it.

March 26, 2019

With estimates that as much as an additional 100 million tonnes of bauxite will be required to meet growth by 2030, there has been concern that refineries will find it difficult to secure the necessary raw materials.

But executives said that a step change in the mining industry’s approach to community relations as well as a better understanding of the desires of governments is now long overdue.

“I don’t think we have a real problem with supply, but environmental and social governance issues threaten to cut off supplies,” Parris Lyew Ayee, executive director of the Jamaica Bauxite Institute, said.

“There’s plenty of low, medium and excellent grade bauxite, and companies have gotten used to wanting the sweet spot of high-grade material, which is something that technology can help with,” he told delegates.

“If you have better relationships with countries and communities, there will be enough bauxite. It’s an issue that can be addressed in the next 10-20 years if it is addressed in a wise way,” he added.

Lyew Ayee called for the creation of an industry working group to establish a template for how to operate worldwide, including interactions with governments, companies and communities.

John Habisreitinger, executive vice president of US-based producer Noranda Bauxite & Alumina, agreed, noting that there is also a role to play for industry organizations such as the International Council on Metals and Mining.

The comments follow a series of incidents that have sullied the reputation of the mining industry, including a fatal dam failure at Vale’s Corrego do Feijao mine on January 25 and the discharge of rainwater from Norsk Hydro’s Alunorte refinery in February 2018, both located in Brazil.

The events at Alunorte – which led to the government-ordered halving of production since – caused Fastmarkets’ benchmark daily alumina index to rally to a record high of $707.75 per tonne fob Australia on April 24.

John Thuestad, executive vice president for bauxite and alumina at Norsk Hydro Brazil, said the mining industry needs to be driven to the next level with its social license to operate, and communities need to feel comfortable that standards will be met.