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Bauxite Mining in Australia.
Taiyou Research, Jan 2012, Pages: 65
Australia is the leading producer of bauxite and alumina globally as well as the fifth largest aluminum producer in the world. Demand for bauxite is growing at a faster rate than the growth in global industrial production. In the emerging economies of Asia and India, bauxite demand is particularly strong. Australia's aluminum industry is a large integrated industry of mining, refining, smelting and semi-fabrication, which is of major economic importance nationally and globally.
The most significant deposits of bauxite in Australia are located at Weipa in northern Queensland, at Gove on the Gove Peninsula in Northern Territory, and in the Darling Range and Mitchell Plateau areas of Western Australia. Deposits at Mitchell Plateau and Cape Bougainville in the north of Western Australia are uneconomic to develop but are important as future resources. All of Australia's bauxite deposits are hosted by aluminum rich soils, with Gibbsite being the main ore bearing aluminum mineral. The Australian aluminum and bauxite industry consists of five bauxite mines, six alumina refineries, six primary aluminum smelters, twelve extrusion mills and four rolled product mills.
Alcoa, BHP Billiton and Rio Tinto Alcan are the biggest players in the industry. The Australian bauxite mining industry is highly concentrated, with only three enterprises accounting for the all of the industry's production. Alcoa alone accounts for about half Australia's bauxite output. The acquisition of Alcan by Rio Tinto in late 2007 increased the industry concentration. The industry is highly regulated, with state governments in particular overseeing nearly all aspects of operation. State governments determine which land is open to exploration and mining, issue exploration and mining leases and collect royalties from producers.
Alumina producers operating in Australia use about 89% of the bauxite mined locally as feedstock for their refineries. In general, ownership of bauxite mines and alumina refineries goes hand-in-hand, with the same firms being represented in both industries. As a result of this vertical integration, there is no direct price competition between bauxite producers in the local market. Similarly, the relatively small volume of bauxite exported tends to consist of intra-company trade. Essentially, the local bauxite mining industry competes with existing and potential bauxite and alumina operations worldwide in terms of the overall cost of production.
In this industry scenario, Taiyou Research analyzes the Bauxite Mining Industry in Australia.
The report commences with an introduction to the Australian bauxite industry, with Australia being the largest producer of bauxite accounting for one-third of the global output. The pricing factor is discussed along with the demand and supply scenario of bauxite in Australia.
Output of bauxite production is analyzed in the report, along with the aluminum demand by the aerospace, packaging and construction industries. Taiyou Research look at how the economic recession worldwide has impacted the Australian bauxite industry, as while the global economic crisis has seen a slump in the output of the industry, the continuing economic recovery is expected to push the global demand for alumina and aluminum thereby boosting output of bauxite production in Australia.
The report looks at the factors impacting the growth of the industry analyzing the rising global demand for aluminum, major projects in the pipeline and new investments for expansion and technology by the key operators.
The existing market potential of bauxite production has been looked into in the report along with the geographic spread of bauxite mining in Australia. The report underlines the highly concentrated nature of the bauxite mining industry in Australia that has limited competition amongst the three existing producers. Success factors in the industry has been highlighted with a detailed study of cost structure and share of revenues. Being a capital intensive industry, the lows and highs of barrier levels have also been looked in to.
Bauxite mining is a highly globalized industry dominated by multinational players. The report brings out the role played by three major players in the industry, that is, Alcoa of Australia Ltd., Rio Tinto Plc. and BHP Billiton Ltd.. These three players control nearly 97% of the market.
The report brings out the low level of technology change and high volatility of revenues as the industry is capital intensive. Although bauxite mining is closely monitored and regulated by the Australia government with low level of governmental assistance, the prospect for the industry looks bright with rising global aluminum demand and sure signs of economic recovery.
Taiyou Research's analysis of the Bauxite Mining Industry in Australia is a cutting-edge research report on the industry.
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