Metro Mining has timed the expansion of its bauxite operation to a tee.

An investment into plant and infrastructure was commissioned just as supply constraints hit the bauxite and alumina market causing the price to jump, the company said.  

Rising prices allowed the company to capitalise quickly coming out of the monsoon season, chief executive officer Simon Wensley said.

“We’ve turned the company around from four years ago we were doing barely two million tonnes and losing cash on every tonne. Expanded it, and I think changed not only the throughput, but the resilience of the whole asset. The risk of the whole asset has changed enormously. 

“We knew the market was moving and changing and we really wanted to make sure we were there when it popped, and it did pop at the end of last year, so we just caught the back end of that with the expansion, which was great. 

“The last quarter we were running almost at our fully expanded rate. Our first half of the year is always a bit slow because of the monsoon season. We then the ramp up from that.”

The company produced 1.9 million tonnes from its Bauxite Hills operation located on the Skardon River at Cape York In the first half of the year, Mr Wensley said.

“We’re targeting 5 million tonnes in the second half and we should see pretty similar margins coming through, similar cashflow generation. 

“Now that takes us to pretty much being net cash. We’ve got $US56 million dollars in debt at the moment but by the end of the next quarter we should be actually in net cash position. So our balance sheet will be very strong.”

Demand continued to grow while one the world’s largest suppliers, the west African country of Guinea experienced sovereignty issues, Mr Wensley said.

The business was investing in its capacity to meet the challenge of being the lowest cost producer in the Asian market by the end of next year, Mr Wensley said

New plant and equipment helped mitigate the effects of the weather, he said. 

“So bigger trucks, bigger equipment, a new screening system that is much more capable of screening wet material. And then our new trans-shipper, which is a much, much bigger asset. 

“As an example, June was actually a bit of an unexpectedly wavy and blowy month up there in the Cape. The initial single floating crane we had, the small one, was unable to operate for about 12 days last month, whereas our trans-ship only had less than a day out of action. 

“We can’t ever solve the weather, but we can certainly mitigate against the impact it has.”