Australian Bauxite: Aluminum and beyond

Australia is the world's largest producer of bauxite, with the majority used to produce alumina for the aluminum 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.

Bauxite, a mix of hydrated aluminum 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 aluminum, refractory sand ceramic proppants.

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

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

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.

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.

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%.

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. 

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.