A stepped-up deal to supply bauxite to Xiangsen Aluminium has given Metro Mining renewed confidence in expansion plans for its Bauxite Hills mine, 95km north of Weipa.

The company said today it had signed an expanded and extended strategic co-operation agreement with the Chinese firm for the supply of about five million wet metric tonnes (WMT) of bauxite from 2022 to 2024.

It said the expanded agreement followed positive trial outcomes at four refineries in the Shanxi, Guangxi and Guizhou provinces in China.

“Metro is delighted to see the relationship with our partner Xiangsen Aluminium go from strength to strength after a good first year of ongoing trials,” Metro Mining managing director and chief executive officer Simon Wensley said.

“It is based on mutual trust and delivering on clear and straight-forward commitments.

“As the Chinese bauxite market evolves and the risk of alternative bauxite supplies become better understood, we are committed to supporting customers who recognise the excellent value and risk package which Metro can deliver.

“This gives us confidence in commencing the refresh of our Stage 2 expansion implementation plans as we move towards an offtake position which will underpin it.”

The parties are working on detailed binding terms and delivery details for the 2022 offtake season, intended to be announced within two weeks

Metro Mining said it would make full use of the new floating crane at Bauxite Hills to effect deliveries to main Chinese ports in large bulk vessels, which will bring cost benefits to both parties.

The new crane, TSA Skardon, commenced loading for the operation last month. It makes Metro the only bauxite supplier out of Australia to be able to service customers in Cape size class vessels (180,000 DWT).

Metro has completed a definitive feasibility study for a Stage 2 expansion at Bauxite Hills to take annual production to 6.0Mtpa.