Metro Mining Limited (ASX:MMI) Managing Director & CEO Simon Finnis provides an update on construction at the company's Bauxite Hills mine project in the Western Cape York Peninsula in Queensland, 100km north of the Weipa.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from Metro Mining Limited (ASX:MMI) is CEO and Managing Director Simon Finnis. Simon, welcome back.
Simon Finnis: Thank you very much, good to be here.
Jessica Amir: First up for those new to Metro Mining. Can you give us a quick introduction?
Simon Finnis: Metro Mining is a bauxite-focused company. We’re developing a DSO bauxite mine about 100 kilometres north of Weipa, on the western Cape York. So we’ll be mining bauxite and sending it to China.
Jessica Amir: You’ve recently announced your FY17 results. What were some of the highlights?
Simon Finnis: We’re not in revenue earning mode yet, so the financials aren’t a highlight for us, but we’ve had a great year. We’ve raised a lot of money and we’ve taken over our neighbour Gulf Alumina, which doubled our reserves and resources. So we’ve had a fabulous year, it’s been a real breakout year for us.
Jessica Amir: Now can you tell us about your Bauxite Hills mine in a little bit more detail?
Simon Finnis: The Bauxite Hills mine is a great little project. It’s got 92 million tonnes of bauxite reserves, DSO bauxite, which is direct shipment ore. It’s a very simple project; we’ll only operate during the dry season. We simply take off the overburden, mine the bauxite layer, which is free-dig so no explosives. Load it into trucks, haul it to the port and then we ship it to China via barges and tugs out to oceangoing vessels. So it’s a very very simple project.
The market itself is very bullish. We’re very very comfortable with where the Chinese market for bauxite’s going and we’re in construction now. We’ll have completed that by the end of the year and then we’ll be in production, after the wet season next year. So nominally the first week of April 2018, the first ship will leave Skardon River. It’s also great to know that it’s a long-term mine; we will be there for at least 17 years. We start off at two million tonnes, ramp up to six million tonnes over the first four years and then run it at that for 14 or 15 years. So it’s a great little project.
Jessica Amir: Now to bauxite prices. Have they been really inflated in line with commodity prices?
Simon Finnis: Not as much and bauxite’s quite an opaque market, so it’s not visible to the outside world really and I think the customers probably enjoy that position. What we are seeing is increased demand; we do anticipate that the demand for bauxite will double over the next 10 years. All our bauxite goes into China, so we’re very very comfortable with that position. And we would expect to see some price appreciation at the time, very hard to predict of course, but we would like to see it go up a little bit and every dollar is cream for us.
Jessica Amir: What about the next 12 months, what does that look like?
Simon Finnis: The next 12 months is really the moment we’ve all been waiting for. So we’re building the mine now, the plan is to deliver that project, the execution phase is very important from a capital construction point of view. It’s a very modest capital budget of $36 million. At this point in time, we’re on schedule and on budget. And we’ll have that built around about the end of November, with some roads and stuff continuing right through to the wet season. And then next year of course, delivering bauxite to China, that’ll be an absolutely fabulous moment for this company.
Jessica Amir: Simon Finnis, thank you so much for the update.
Simon Finnis: Thanks for having me.