GREEN pastures west of Taralga barely betray what’s believed to be the third largest bauxite deposit in history.
Red gravel just below the surface was the first hint that a rich resource lay beneath a scrubby part of the country.
The company brought out the big guns – satellite equipment - to find the estimated 28-metre deep deposit at Mt Rae. It’s seven times thicker than most, astounding CEO Ian Levy.
He believes the deposit, found in one drill hole, is the third largest ever found, behind a 50- metre deep intercept in Guinea and a 42-metre one in Brazil.
“We didn’t expect it at all,” Mr Levy said.
“…We checked it and had low hopes. But we couldn’t drill right through it, which means 28 metres is the minimal thickness.”
Bauxite is the main source of aluminium and is in hot demand from China. A $1.5 million pre-feasibility study underway on land stretching from 10km west of Taralga basically over to Crookwell estimates a 25 million tonne premium grade resource.
The results continue to surprise, Mr Levy says, and there’s potential for more discoveries. There’s a long way to go yet and the company doesn’t want to get anyone’s hopes up.
But if ABx presses ahead with extraction, there’s enough supply for at least 20 years and jobs for 40 local people. Mr Levy said while 25 million tonnes wasn’t much in the context of big players like Alcoa and Rio Tinto, the Taralga district deposit had clear advantages.
“It’s in a temperate climate, not a tropical one, so we can produce all year round,” he said.
“Secondly it’s near Port Kembla and we’ll be contributing to the port’s resurgence and finally, it’s an old deposit washed free of clay, which is easier in the production process.”
The company has been investigating the area since 2008 and drilling since early 2010.
The bauxite appears in ‘pods’ between Taralga and Crookwell and the largest deposit within this is a 1km by 500m seam.
ABx would buy or rent graziers’ paddock to extract the resource over three years, then rehabilitate the land.
Negotiations are underway. The operation was unlikely to require a permanent plant, but a crusher and screen moving between properties, Mr Levy said.
The company is in the midst of a $2m, two and a half year ecological study. If the venture goes ahead, ABx would extract 3m tonnes annually.
Currently bauxite fetches US$65 a tonne but shipping and other costs strip this to a more modest return. “We’d be happy to make a few dollars out of it,” Mr Levy said.
The pre-feasibility study, due to finish in March will inform the company whether to press ahead or walk away. But there’s a “better than 50/50 chance” it will proceed.
“We’re beyond the ‘extremely unlikely’ stage (of most projects) and it’s becoming a possibility,” Mr Levy said.
“Our view is we do the community a big disservice if we give them false expectations.
“As soon as we have the facts about getting the material to the ocean in a cost effective way, the community will be the first to know.”
China imports 50 million tonnes of bauxite annually.
It is converted into aluminium oxide and smelted into aluminium in countries with low electricity costs, increasingly the Middle East, Russia and Iceland.
With Indonesia looking to stop bauxite imports, and process the ore itself, Mr Levy says Australia will soon be China’s main supplier.
The company hopes Taralga will be the first of its three projects to supply the growing market.
Email a friend