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Lao bauxite mine development reaches new milestone
Development of a major bauxite mining project in the southern province of Saravan has reached a new milestone as the project developer has found an aluminum buyer and a financer.
Sino Australian Resources, which is developing the bauxite mine on the 1,000 metre-high Balaven plateau in the Champassak and Saravan border area, signed a memorandum of understanding with a Chinese company to sell 600,000 tonnes of aluminum per year.
Sino Australian Resources expects to reach a 20-year aluminum purchasing agreement with China Non-Ferrous Metal Industry's Foreign Engineering and Construction Co Ltd in the near future, according to Ord River Resources, which holds a 49 percent interest in the Lao bauxite mining project.
The price of the mining products will be based on internationally recognised market prices which will be adjusted to reflect the market's prevailing prices, the Australian company said.
The agreement between the two companies completed the initial round of negotiations for the three most important building blocks of the planned construction of the 600,000 tonne alumina refinery in Laos.
One of the significant milestones for the mining project was the agreement with China Minsheng Banking Corporation, one of the largest Chinese banks, to finance 70 percent of the project. The rest of the investment funds will come from Sino Australian Resources.
Ord River Resources and China Non-Ferrous Metal Industry, which holds a 61 percent interest in the bauxite mine, plan to raise the remaining investment capital of about US$180-US$200 million for what will be the second largest Alumina mining project in the world from an initial public offering either at the end of this year or early next year.
One of the big investment potentials is that the price of alumina is projected to rise to reflect a fundamental upward shift in the long-term demand curve. Alumina is in high demand in fast growing nations, including China, to supply their growing manufacturing bases.
Sino Australian Resources is continuing to make solid progress in the feasibility study for its Laos aluminium project. In the first week of June, project contractor Sinomine Resource Exploration Co Ltd undertook a significant volume of project work, including a topographic survey, building a temporary camp and conducting drill site assessment on 80 holes .
The contractor completed 15 percent of exploration drilling in three areas, while sampling and processing for exploration drilling of four additional areas has also been completed.
According to economists, aluminum will become one of the new driving forces of the Lao economy once the project begins commercial operations.
vientiane times
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