The promising global market creates opportunity for bauxite mining growth in Sierra Leone
----Interview with Basudeb Datta, Operations Director of Sierra Mineral Holdings Limited
Asian Metal: According to China Customs, China imported around 7 million tons of bauxite from Guinea during January and September of 2016 and the volume may increase further in 2017, and more projects will witness substantial progress. Chinese interest in African bauxite investment becomes strong. What do you think of the outlook for bauxite from Sierra Leone?
Basudeb Datta: The global market is looking promising and automatically creates opportunity for further growth in the bauxite mining industry in Sierra Leone. Sierra Mineral Holdings Limited (SMHL) Vimetco in Sierra Leone is committed to promote bauxite in the world market, as it is not so known and famous like Guinea bauxite due to the fact that 90-95% of production volume was exported to its parent holding for alumina production in Romania and never enter to open market. Sierra Leone has been producing premium quality bauxite since historic past and there remains significant potential to export high quality beneficiated bauxite as well as direct shipping grade ore. I believe that Sierra Leone has huge potential to be one of the long term supply sources in the world.
Asian Metal: When did you start bauxite development? Is there any new progress? How about the current capacity per annum?
Basudeb Datta: Sierra Mineral Holdings Limited is a leader in the bauxite mining industry in Sierra Leone. Currently SMHL is mining around 2.9 million tonnes of run of mines equivalent to approximately 1.5 million tonnes of export volume of beneficiated bauxite per annum, however, there exists scope to increase the export volume provided there is demand for it. We need to consume 1.3-1.4 million tonnes of bauxite by ourselves each year with few exports to Asia.
Asian Metal: Did you have any offer before? How about Chinese buyers’ reaction? What is your marketing strategy in China? Will you focus on long-term contracts or spot deals? Will you also sell to other countries?
Basudeb Datta: So far SMHL has been exporting 100% of its production capacity to its parent holding within the Vi-Holding Group, however SMHL recognized the huge demand for SMHL bauxite from Sierra Leone in the market with numerous offers from end consumers across the globe. Many reputable Chinese buyers approached us with long term off-take agreement with considerable volume of bauxite based on very positive feedback on technical and technological tests carried out by a number of end consumers. Though at present we are exporting majority of production volume to our parent holding, but going forward SMHL is open to all potential external buyers for possible trial shipments which will mostly like end up into long terms off-take agreement. SMHL is presently in negotiation with a number of potential reputed buyers from Asia who already showed us tremendous interest to build long term business relationship and we are confident to strike a favorable deal before the end of current year.
Asian Metal: How about the location, reserves and quality of your bauxite project? How do you think of the price for your bauxite in Q4?
Basudeb Datta: SMHL bauxite from Sierra Leone is unique in terms of quality. It is high grade gibbsitic (tri-hydrate bauxite) absolutely suitable for low temperature-low pressure refineries resulting a lower production cost for alumina refineries. Currently SMHL is actively exploring and mining within its Mining Lease (ML01/05) in the Southern Province of the Republic of Sierra Leone. SMHL has a stable production flow to meet its export volume of 1.5 MT per annum and at the same time following a strong exploration portfolio to ensure constant renewal of its depleted mineral resource and ore reserve base. We believe SMHL pricing strategy is competitive in the global market considering its superior quality. Presently SMHL is offering its cargo in FAS and FOB terms.
Asian Metal: How about the infrastructure situation in Sierra Leone? For example, railway and port?
Basudeb Datta: Infrastructure in Africa is challenging and the same in Sierra Leone is not an exception. We do have few challenges in terms of the type of vessels (Handymax and Supramax) permissible for loading due to draft limitation of the sea port. The bauxite is being transshipped by push boats and barges to deep sea, where the ocean going vessel with self-geared cranes and grabs loading bauxite to the vessel. At present SMHL is loading approximately 7,500 to 8,000 metric tonnes per day in average.
Asian Metal: Are the export and mining policies favorable in Sierra Leone? Are there any duties?
Basudeb Datta: There is no restriction on export volume and destination, as long as the applicable taxes and duties are paid to the Govt. of Sierra Leone and its agencies. In our case taxes are paid to the SL Govt. by SMHL.
Asian Metal: Do you have interest in finding more investors to join the project?
Basudeb Datta: As mentioned earlier, there exists opportunities to ramp up production capacity and exportation volume with better infrastructure and supported by serious exploration intervention to upgrade current mineral resource and ore reserves. Hence, we are open and interested to find serious investors to join the project.
Asian Metal: Are there any other advantages of bauxite from Sierra Leone?
Basudeb Datta: As mentioned earlier, bauxite from Sierra Leone is unique in terms of its quality. It is premium in nature, 100% tri-hydrate bauxite, absolutely suitable for low temperature and low pressure low energy intensive refineries resulting lower production cost for downstream processes. There is no monohydrate content in the bauxite. Bauxite is cleaned and beneficiated. Total Alumina varies in the range of 49 to 50% and total silica ranges between 3 to 4%.
