Global Bauxite production is projected to grow from 292 million tonnes in 2017 to 357 million tonnes in 2023 at a CAGR of 3.4% based on the data published by The Department of Industry, Innovation and Science. In a report supplied to ARI this week, Sambit Kumar provides an insight into bauxite.
The exploration of natural resources has always been a building block for industrial development. Addressing the consistently rising demand for an ever-broadening range of minerals has always been a priority for the government, aiming towards sustainable development of the nations. Named after a French village of Les Baux in Southern France, Bauxite ore has now become a globally traded commodity and is gaining importance in contributing to the world supply of aluminium. Bauxite is an aluminous rock composed of a group of aluminium oxides, iron oxides, silica and titanium dioxide. The mining of bauxite has turned truly global owing to the strong need of aluminium across the globe.
As bauxite is one of the commercially viable ores used as a source for primary aluminium production, the global bauxite mining industry is expected to witness structural changes by 2025. For instance, the domestic supply of bauxite has been depleted in China for environmental reasons, which is anticipated to propel the import of bauxite in the country. Bauxite is projected to witness a value-driven growth in coming years, underpinned by the expansion in the automotive & transportation sector. The rising uptake of aluminium in vehicles is likely to offer the further potential to the bauxite mining. Stringent government policies on carbon dioxide emission are compelling the automobile manufacturers to produce fuel-efficient vehicles. However, national & international environmental legislation states that over 84% of bauxite comes from mines where an environmental license is required during operation, and rehabilitation plans are needed to be approved by the respective environmental management agency. Environmental pollution occurring due to bauxite mining remains a global concern because of the detrimental short and long term effects on the environment. As bauxite is majorly located close to the surface, the mining process disrupts the surface. Thus, major bauxite mining companies are emphasising on the conduct of environmental-friendly mining practices and have subscribed to voluntary improvement programs such as land rehabilitation.
Bauxite reserves, which are mostly located in the belt areas around the equator, were estimated at close to 30 billion tonnes in 2017 based on data published by the Indian Bureau of Mines. The Top 5 countries (Guinea, Australia, Vietnam, Brazil and Jamaica) account for almost 70% of the bauxite reserves in the world. The recent mining boom in Asian countries has created a significant level of demand for the development of specialised mining technologies & systems. Rapid industrialisation & urbanisation in the emerging economies of Asia Pacific has dramatically transformed their position in the global minerals market. Australia, China and India are among the Top 5 producers of bauxite in the world. Significant growth of Chinese alumina refineries and smelters, along with industrial changes in countries such as Indonesia, has created remarkable opportunities for direct export of the raw bauxite from these countries. China is anticipated to be broadly balanced in the production & demand for aluminium in the next few years, which will surely have implications on the bauxite supply from China to the rest-of-world. In June 2017, China and Ghana signed a memorandum of understanding to collectively develop a US$ 10 billion bauxite project in the West African nation, which is likely to have a significant impact on the export value of Bauxite in Ghana.
The mining industry of Australia, which is the strongest pillar of the Australian economy, generated around US$ 180 billion in export revenues in 2018. The country, which accounts for around 20% of the global bauxite reserves, is the largest producer of bauxite with five Australia-based mines accounting for over 23% of the global production in 2016. Huge investments have taken place in the bauxite mining industry in Australia in recent years making it a highly integrated sector of Asia Pacific.
Historically, the demand for bauxite was met by a handful of major market players such as Rio Tinto and Alcoa Corporation, but a liberal foreign investment regime of Asian countries and the robust growth in demand for aluminium has seen a significant increase in the number of mines and influx of new entrants in the market. Australia-based Rio Tinto is a market leader in the bauxite mining and generated a revenue of US$ 11 billion from its aluminium products in 2017. The bauxite production of the company totalled 50.4 million tonnes in 2018. A global surge in the mining investment over last five years has resulted in the substantial rise in the bauxite mining capacity of the key players such as Rio Tinto, Alcoa Corporation, Aluminium Corporation of China Ltd., Norsk Hydro ASA, Broken Hill Proprietary Company Ltd (BHP Billiton) and Aluminium Bahrain.