Bauxite prices have begun to firm for Metro Mining (ASX: MMI), setting up a stronger second half for its Bauxite Hills mine in North Queensland.

The company said it had negotiated price rises of about 9 per cent for the September quarter, as freight costs from Guinea climbed.

Metro said roughly 80 per cent of its 2026 shipping was locked in on fixed long-term freight contracts, insulating it from the volatile freight market.

Chief executive Simon Wensley said the record quarterly output was pleasing given the cyclone recovery and the transhipper’s absence.

“Achievement of record Q2 output was pleasing given the post cyclone recovery and the absence of our primary transhipper, Ikamba for its 5 year dry dock service, for a portion of the quarter. In June, we demonstrated proof of concept of our new integrated planning and operating system and aligned management structure, thanks to focussed efforts from Metro and contractor teams.

“I expect our focus on production reliability, grade control and planning to coincide with excellent mining and shipping conditions to deliver over 5 million tonnes in the second half of 2026. As most of our freight is fixed, this will deliver lower operating costs straight to the bottom line in likely strengthening market conditions, as Guinea producers seek to cover freight and diesel cost rises.”

Related: Confident outlook as Metro moves into 2026

Metro posted record June-quarter shipments of 1.8 million wet tonnes, up 7 per cent on a year earlier, despite Tropical Cyclone Narelle.

The result also absorbed the dry-docking of its main transhipper, the Ikamba, which returned to service in May.

June shipments set a monthly record of 779,000 tonnes, up 32 per cent on the same month last year.

Margins, however, were squeezed, with site earnings before interest, tax, depreciation and amortisation falling to A$4.4 a tonne.

That compared with A$31.9 a tonne a year earlier, reflecting softer prices, cyclone-related freight costs and higher diesel and pre-stripping costs.

The company said much of the cost pressure was deliberate, bringing forward stripping to lift mining flexibility for the rest of 2026.

Metro ended the quarter with A$23.8 million in cash and reduced its secured debt to US$31.5 million.

It held calendar 2026 shipment guidance of 6.6 to 7.1 million tonnes and expected to start a share buy-back this quarter.

During the quarter Metro reported groundwater-quality non-compliances with its state environmental authority, which it said were consistent with historical seasonal trends.

The company also began reviewing its Pisolite Hills resource to align the estimate with the JORC 2012 code.