BAUXITE – ALUMINA – ALUMINIUM Characteristics Bauxite, the most common ore of aluminium, is a hard, reddish, clay-like material. It was first discovered near the village of Les Baux in southern France. Bauxite occurs in three main forms: gibbsite (aluminium hydroxide), böhmite and diaspore (both aluminium-oxide-hydroxides). Gibbsite is the dominant form mined. Bauxite is a residual type of ore deposit that has been left on the land surface following intense weathering and the removal by leaching of other minerals. Consequently, it tends to occur mainly in tropical and subtropical regions such as the Caribbean, parts of Africa, South America, and Australia. The largest reserves of bauxite are in Guinea (7400 million tonnes), Australia (5800 million tonnes) and Jamaica (2000 million tonnes); (Bray, 2008). Alumina (aluminium oxide) is a white granular material produced from bauxite by the Bayer refining process, which involves dissolving the bauxite in caustic soda at high temperature and pressure. Aluminium hydroxide is then precipitated from the liquid and this is calcined to form aluminium oxide powder. Aluminium metal is produced by the electrolysis of alumina dissolved in a molten salt in a smelter. This process is a very large consumer of electrical power and as a consequence the availability of cheap electricity tends to determine the location of aluminium smelters. Pure aluminium is a silver-white metal with many desirable characteristics. It is light, non-toxic, non-magnetic and nonsparking. It is easily formed, machined or cast, and forms alloys with many other metals such as copper, magnesium, and silicon. Aluminium and most of its alloys are highly resistant to corrosion. It is also a very good conductor of electricity (IAI, 2007). Uses Bauxite is primarily used to produce alumina through the Bayer process. However, between 5 and 15 per cent of bauxite is of non-metallurgical grade and most of this is calcined into ‘brown fused alumina’ for use in the abrasive or refractory markets. Approximately 90 per cent of alumina produced in the world is used in the production of aluminium metal through smelting. Some of the remaining 10 per cent is calcined at higher temperatures than smelter grade alumina and is used for a wide range of refractory and ceramic purposes. Fused alumina is formed in electric arc furnaces at high temperatures and is used in the manufacture of abrasives and refractories (Tran, 2007a). Aluminium is, in terms of tonnage, the most widely used nonferrous metal. It is used extensively in the transport manufacturing industry (most importantly in the aerospace industry but also in road vehicles, trains and ships), packaging (cans, foil), water treatment, construction (windows, doors, wire), cooking utensils, electrical transmission lines, electronics, CDs and transistors. It is also used in paints and rocket fuel. In most uses it is alloyed with small amounts of other metals such as magnesium and manganese. Recycling is an important feature of aluminium use and recycled metal (including manufacturing scrap) contributes about 39 per cent of consumption. 2 <strong>World</strong> production in 2006 Australia mined the most bauxite in 2006, extracting 32 per cent of the world total. <strong>Production</strong> here has increased by 14 per cent since 2002. The second largest is Brazil, with 12 per cent, closely followed by China, with an estimated 11 per cent. China’s bauxite production has risen by 62 per cent since 2002 (although it remains heavily dependent on bauxite imports), whereas Brazil’s production has risen by 74 per cent over the same period. The fourth largest producer of bauxite in the world is Guinea. Here production fell in 2006 compared to 2005, and the increase from 2002 to 2005 was only 10 per cent resulting in volumes falling below those of Brazil and China. The other country showing a significant rise is India, where production has increased by 54 per cent since 2002. In 2006 India’s output overtook that of Jamaica, which had been a major producer of bauxite for many years. Australia is also the world’s largest producer of alumina, with 25 per cent of the world total. China is the second largest producer, with 19 per cent. Other major producers are Brazil, with nine per cent of the world’s total; the USA, with seven per cent; and Jamaica, with six per cent. <strong>Production</strong> in China has increased by more than 150 per cent since 2002 and Brazil’s output has increased by 74 per cent over the same period. Romania and Azerbaijan have also shown significant increases since 2002, although each had only one per cent of the world production total in 2006. The world’s largest aluminium metal producer is China, with 28 per cent of the world total. The next biggest producers are Russia, with 11 per cent, and Canada, with nine per cent. China’s aluminium production has increased by 116 per cent since 2002. Mozambique also increased output significantly, rising by 106 per cent since 2002, Bahrain’s grew by 69 per cent and India by 60 per cent, although these countries each had two or three per cent of the total world production in 2006. By contrast, aluminium production in the USA fell by 16 per cent in the five years since 2002. Prices Metallurgical grade bauxite and alumina are mostly traded on long-term contracts and typical prices are not published. During 2007, Chinese refractory grade bauxite generally traded in the range US$130 to US$160 per tonne, depending on the specification, with Guyanan refractory grade bauxite ranging from US$165 to US$235 per tonne (Tran, 2007b). Spot prices for metallurgical grade alumina were relatively stable throughout 2007, at around US$350 per tonne. This compares to a dramatic rise and fall that occurred in 2006 with prices reaching a high of over US$600 per tonne in April 2006 and a low of nearly US$200 per tonne in December 2006 (Metal Bulletin, 2008). The London Metal Exchange official daily cash price for aluminium ingot showed a generally increasing trend from below US$1500 per tonne in 2003 to nearly US$3000 per tonne by mid-2007, despite a sharp fall in May 2005 and a spike in May 2006 (Metal Bulletin, 2008). In the latter half of 2007 the price fell to below US$2500 per tonne as a result of weaker demand.
US$/tonne US$/tonne 700 600 500 400 300 200 100 0 Jan-1997 3500 3000 2500 2000 1500 1000 500 0 Jan-1997 Jul-1997 Jul-1997 Jan-1998 Jan-1998 Jul-1998 Jul-1998 Industry events in 2007 The year started with the completion of the merger between the Russian producers Rusal and Sual, and the aluminium assets of Swiss-based Glencore International. This merger resulted in a new organisation, United Company Rusal, which is the largest alumina producer in the world. At the time they also claimed the top place in aluminium production, but only held this for a few months. Jan-1999 Jan-1999 Jul-1999 Jul-1999 Jan-2000 Jan-2000 Jul-2000 Jul-2000 Jan-2001 Alumina Price Trend Jul-2001 Jan-2002 Jul-2002 Jan-2003 Aluminium Price Trend Jan-2001 Jul-2001 Jan-2002 Jul-2002 Jan-2003 Jul-2003 Jul-2003 Jan-2004 Jan-2004 Jul-2004 Jul-2004 Jan-2005 Jan-2005 Jul-2005 Jul-2005 Jan-2006 Jul-2006 Jan-2007 Jul-2007 Jan-2008 The largest ever takeover in the mining sector was completed in October, when Rio Tinto completed their US$38.1 billion purchase of the Canada-based Alcan Inc. Rio Tinto Alcan is now the largest aluminium producer in the world, ahead of United Company Rusal. Rio Tinto Alcan is also the largest bauxite miner and a significant producer of alumina. Jan-2006 Jul-2006 Jan-2007 Jul-2007 Jan-2008 3
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