Alufer targets the first shipment of Guinean bauxite in Q3 2018

Asian Metal: According to China Customs, China imported around 21.8 million tonnes of bauxite from Guinea in the first ten months of 2017, up by 154.5% YOY, and more projects will witness substantial progress. What do you think of the advantages and disadvantages of Guinean bauxite compared with other bauxite?

Bernie Pryor: Guinean bauxite is known to be some of the highest quality material in the world and Bel Air is a good example of this as it has high available alumina, low reactive silica and low deleterious elements. Our location does mean that our freight costs to Asian markets are higher than from other bauxite producing countries, but these costs also dependent on the shipping market which can fluctuate.

Asian Metal: When did Alufer start bauxite development in Guinea and how about the new progress? Will Alufer supply bauxite from Guinea in 2018? How about the reserves and quantity?

Bernie Pryor: Alufer commenced construction at the Bel Air project in January 2017 and we are now over half way through our schedule. We are currently on time and budget and first ore on ship is targeted for Q3 2018. The Bel Air project has a JORC compliant resource of over 146mt of high grade trihydrate bauxite with low reactive silica.

Asian Metal: How will Alufer compete with other owners in Guinea and what are your advantages?

Bernie Pryor: Our key advantage is that our project is located 15km from the coast and we are building our own dedicated logistics and export facility. We have a simple mining methodology as we will be surface mining and also have an efficient materials handling infrastructure. The quality of our ore is a significant advantage as well.

Asian Metal: Indonesia resumed bauxite export early this year, and six owners already got export quota with a total volume of around 14.7 million tonnes. Malaysia will also resume bauxite export in 2018. Will that affect Guinean bauxite? What is your opinion?

Bernie Pryor: As noted above, Guinean bauxite is known to be some of the highest quality in the world and Bel Air is a good example of this. Due to the high grade nature of Bel Air ore, we don’t think the market for our material will be too impacted by other supply.

Asian Metal：How do you think of the demand in China two years later? What is your marketing strategy in China? Will you focus on long-term contracts or spot deals? Will you also sell to other countries?

Bernie Pryor: We consider the medium to long term demand for bauxite to be strong. China is a core market for us and we will look to secure offtake contracts, but are also in discussion with Atlantic customers as well.

Asian Metal：According to Asian Metal index, current prices of Guinean bauxite range from USD50-60/t CIF China. What is your expectation next year?

Bernie Pryor: We don’t tend to comment on our specific pricing forecasts but we consider the medium to long term outlook to be positive.

Asian metal: How does Alufer solve the financing? Do you have interest in finding more partners?

Bernie Pryor: We secured US$205m of construction finance in December last year from a consortium of investors which included RCF, the African Finance Corporation and Orion Mine Finance and we are fully funded through to production.

Asian metal: Does Alufer have other mining businesses? How is the experience in bauxite?

Bernie Pryor: Alufer currently is a pure play bauxite company and taking the Bel Air project into production is our main focus at the moment. We also have the Labé licence in Guinea which is a high grade deposit but is located further inland so is a different investment proposition. We see a lot of potential within the bauxite market and look forward to becoming a significant supplier of high quality product.

Asian Metal: Do you need to add more information for the project?

Bernie Pryor: As noted in the introduction, we put a great deal of importance on sustainability and we are adopting the IFC environmental and social performance standards, along with the Equator principles as best practice for the Bel Air project. We are also committed to creating employment and opportunities for the local communities – we are fully compliant with Guinean labour laws and will be looking to provide training and development programmes where possible as the project moves forward.

Asian Metal: Thanks a lot.