Metro Mining is continuing steps to lift Bauxite Hills production to 7Mtpa amid a firming bauxite market.

The company is gearing up to restart mining at the Cape York site later this month and load its first ship on April 2 after a wet season hiatus that saw it tick off a range of upgrade and maintenance tasks.

Metro said the planned production rate for Bauxite Hills in the coming quarter was 3.5 to 4 Mtpa, ramping up in Q3 to a 5-6 Mtpa rate.

This aligns with capacity upgrades to the relevant parts of the Bauxite Hills flow sheet.

Metro said wet season site maintenance had been focused on the screen grizzly feeders, conveyors and chutes to build on the capital spent in 2022 on screen decks.

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The site’s barge loading facility has been the subject of work to take capacity from 1500 to 2000 tonnes per hour in time for the operational restart.

And Scania and Blake Machinery Group has been making necessary modifications to a new prime mover fleet, which will be arriving at the mining site from this month. Additional trailers have been procured.

It comes as Metro finalises project engineering, procurement and financing for the remaining elements of a planned expansion to 7Mtpa – a second floating crane barge and enhanced screen solution.

“MMI is also pleased to announce that it has signed a non-binding MOU with a third base load customer for offtake commencing in 2024 and ramping up in 2025 to 2Mt per annum,” the company said in an update to the ASX this week.

“The counterparty is Chifeng Qihui Aluminum Development Limited. This remains subject to entry into long-form binding documentation once material contractual terms have been agreed, but is encouraging confirmation of the value proposition of MMI bauxite in the market and is perfectly aligned to MMI’s expansion plans to 7 Mt per annum over the next two years, to take advantage of the significant inherent economies of scale.”

Metro Mining reported that the traded bauxite market remained firm after a strong 2022, when Chinese bauxite imports broke previous records of 126 million tonnes – up 17 per cent year on year.

Demand was expected to remain strong in 2023 as alumina capacity increased and as traded bauxite supply was constrained by the exit of Indonesia from the market, it said.

“This should see prices for Australian bauxite to continue to rise through the year. MMI has agreed offtake agreements for up to 5Mt for 2023 and has secured Q2 2023 price outcomes approximately 30 per cent higher than CY 2022 across 1.4Mt of sales.”