Australian Bauxite subsidiary eyes Tassie development

ASX-listed Australian Bauxite’s 89 per cent-owned chemical refining subsidiary, Alcore, is gearing up to become the first domestic producer of aluminium fluoride. The company is looking to ramp up from a laboratory-scale to a commercial-scale production outfit and in the process diversify and increase the security of supply for Australasian smelters.

Alcore was established to fund and operate the aluminium fluoride project that entails the proposed construction of a processing plant designed to convert aluminium smelter waste and low-grade bauxite into aluminium fluoride using new Australian technology.

Alcore plans to kick off the staged development by building a production module at Bell Bay in northern Tasmania with a capacity of 10,000 tonnes of aluminium fluoride per annum, followed by the gradual addition of up to five production modules of the same size.

CAPEX for the first aluminium fluoride production module has been estimated at A$20 million, with construction and completion of the module slated for 2022.

The Bell Bay industrial precinct comprises an aluminium smelter, a manganese smelter and an aluminium powder plant. Aluminium fluoride is an essential ingredient in aluminium smelters and Australasian smelters’ supplies of the product are currently fully imported.

Operating costs for the initial years of aluminium fluoride production have been forecast by Alcore at between US$800 and US$950 per tonne, based on the anticipated costs of raw materials for a plant in Bell Bay. UK-headquartered industry research group Roskill estimates the operating costs of most global aluminium fluoride production ranged from US$1,000 to US$1,500 per tonne last year.

According to Alcore, Australasian smelters’ aluminium fluoride imports from China alone in the past 12 months totalled more than 26,000 tonnes at an average sales price of US$1,266 per tonne. The median long-term aluminium fluoride market price has been US$1,175 per tonne, which Alcore says has been chiefly determined by the Chinese export price and offers a potentially attractive operating margin.

Alcore Chief Executive Officer, Mark Cooksey said: “For the process selected for our first 10,000 tonnes a year production module, we have demonstrated all of the key requirements at the laboratory scale. The updated economic assessment confirms that this is a very attractive project. We are accelerating the engineering validation for the first production module.”

The engineering work aims to confirm and optimise the Alcore process – that predominantly uses standard processing equipment, minimising the cost and risk of development – and product performance at a larger scale and produce bigger samples for evaluation by aluminium smelters.

Alcore says it intends to initially use aluminium hydroxide for the proposed commercial production of aluminium fluoride, before expanding to processing bauxite or aluminium-rich smelter waste, which further reduces operating costs, however is not essential in the early years of production to make the project economic.

Current operating cost estimates are derived from the purchase of aluminium hydroxide and recycled aluminium smelter waste as the source of fluorine. According to the company, upside potential as far as margins are concerned lies in future cost reductions from using bauxite or aluminium-rich smelter waste.

Alcore, which has been producing aluminium fluoride of commercial composition and bulk density at its Central Coast, NSW laboratory, says its process is the first in the world that leads to the production of aluminium fluoride from the recycling of aluminium smelter waste and from Australian Bauxite’s gibbsite-rich clean bauxite.

Sydney-based Australian Bauxite recently lodged a mining lease application for the proposed $15 million development of the Sunrise metallurgical-grade bauxite project 115km south-west of the Port of Bundaberg in Queensland. The initial mining focus will be on higher-quality gibbsite-rich trihydrate bauxite at the Binjour deposit.

Australian Bauxite currently produces fertiliser-grade and cement-grade bauxite at the Bald Hill mine in northern Tasmania.

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