Business Spectator’s Rob Burgess has posted an interesting article today on the potential for a nickel and bauxite mini-boom to develop in Western Australia following Indonesia’s decision to ban exports of these resources:
Having supplied the Middle Kingdom with around 25 per cent of its bauxite, Indonesia will now force Chinese smelters, which in the space of a decade have gone from 10 to 50 per cent of the world’s smelting capacity, to find new seaborne bauxite supplies.
And that’s one thing WA should be able to help with.
Perth-based Bauxite Resources has been out and about trying to convince investors that it’s the firm to get bauxite (as opposed to refined alumina) exports happening.
In an interview last month, Bauxite Resources (BAU.AX) chief executive Peter Canterbury explained that with plenty of existing rail infrastructure to service the ports of Kwinana and Bunbury, bauxite exports in WA offer a “low capital start-up” compared with other sites around the world.
That’s true. WA’s south-west region bauxite – as this columnist was told by Alcoa on numerous mine site visits during his WA school years – is pretty much lying around, ready to be scooped up.
It’s typically covered by two metres of top-soil, which canny miners have learned over the decades to put to one side and then replace when the resource has been extracted.
…to see the potential of this mini-boom, it’s worth noting that up to 200,000 jobs are thought to be in jeopardy in Indonesia following the export ban.
Those numbers would not be replicated in a high-wage economy, of course. But for the time being, the development can be sold by both state and federal governments as a source of job creation at a time when much larger resources sectors – particularly iron ore – are winding down their construction phase.
Definitely worth watching.
