Bauxite Developments in Vietnam

Transcription

1 Bauxite Developments in Vietnam Murray Lines Stratum Resources, Sydney, Australia

2 No shortage of Bauxite It s all about grade, politics & logistics

3 Asia-Pacific Economies GDP in PPP terms Source: Ibisworld sept.15

4 Asia-Pacific Population % of total Source: Ibisworld sept.15

5 Global Bauxite resources Global bauxite resource distribution is relatively concentrated. Guinea, Australia, Vietnam, Brazil, Jamaica: these 5 countries reserves represent ~80% of the total. China s bauxite reserves only account for ~3%, therefore heavily reliant on imports. China will dominate global aluminium market & industry development Vietnam close proximity if it allowed exports of bauxite

6 Vietnam Bauxite brief introduction Vietnam - estimated to hold the world's third-largest bauxite ore reserves, after Guinea & Australia. The majority of Vietnam's reserves are located in the Central Highlands (Tay Nguyen) & have only been minimally mined to date Bauxite is typically strip-mined & is used to produce alumina then from late 2016 aluminium metal. According to estimates by Vietnam's Ministry of Industry & Trade, Vietnam's reserves in the Central Highlands are estimated to be ~3.65 billion tonnes. Despite its large reserves, Vietnam produces only modest tonnes of bauxite per year. Environmental issues and local resistance are current problems for growth. Corruption is said to be an issue.

7 Bayer Process Cycle Source: Alteo.alumina.com

8 Bauxite in Vietnam vision to 2025 Bauxite is very abundant in Vietnam Total reserves ~ 3.65 billion tonnes Especially in : Highlands (Tay Nguyen) Northeast (Bac Bo) Two types of bauxite: Lateritic formed in the weathering crust Residual weathering (deposits in the north-east) 147 bauxite deposits including: 5 very large 12 medium 43 small 87 minor Vietnam lateritic bauxite ore

9 Bauxite in Vietnam vision to 2025 Some deposits have been prospected in detail with feasibility projects of bauxite mining & alumina production Other deposits have been identified but yet to go through feasibility study for economic mining & upgrading to alumina

10 Weathered Bauxite deposits in the south Ore quality dependant upon grain size The average grade of crude ore: Al2O % Silica 5-9 % Fe2O % Siliceous modulus 5-20 Ore - readily upgraded by simple washing (+1mm) reduces Si Main minerals are Gibbsite & Goethite Minor minerals include carbonates, ilmenite & anatase (TiO2)

11 Million tonnes China Bauxite Imports Tonnes Tonnes Tonnes Tonnes Tonnes Australia Indonesia India Malaysia Dominican Republic Ghana Brazil Other Source: UN Comtrade

12 China Bauxite Imports - driving demand Million tonnes e World ~45 Australia ~20 Indonesia India ~5 Malaysia ~15 Dominican Rep Ghana Brazil ~5 Vietnam Other = Govt ban on bauxite exports Source: UN Comtrade

13 Vietnam a transit country for Chinese Aluminium destined for third countries Source: Wood Mackenzie, Vancouver

14 Vietnam Bauxite Minerals to Aluminium Metal Plus disguised primary Al metal from China Source: SME

15 Life cycle of bauxite mining project Exploration Discovery Assessment Development Production Closure Rehab Bauxite Supply Factors Location Quality National politics Infrastructure Capital availability Security of investment Green issues red dust & mud, congested roads, ports etc. Red mud settling & disposal Probable accuracy of each study/design phase Production process ~4-6 tonnes of bauxite ~2 tonnes of alumina ~1 tonne of aluminium Key Consumables: Caustic soda, lime, flocculant & energy

16 China Bauxite Imports by Source Country Malaysian imports

17 Vietnam Bauxite to Alumina then Metal Highland bauxite & alumina projects near Tay Nguyen New aluminium metal smelter under construction at Dac Nong

18 Vietnam & Malaysia different strategies Bauxite - Alumina- Aluminium Malaysia Export raw (some screened) to China Vietnam mines & processes to alumina & soon Aluminium rather than export bauxite Adding value locally but at considerable environmental cost?

19 Bauxite provinces & logistics to Vinh Tan Port Vinacomin considered constructing the port at the Ke Ga but changed to Vinh Tan Port to develop the project to save investment costs. Vinh Tan is the site of a major power station. Vinh Tan Port is ~ 120 km from Ke Ga. Vinh Tan Port - planning Vinh Tan port

20 Bauxite in Vietnam Opposition still strong to government plans to develop bauxite mines Vietnam plans to develop its rich bauxite reserves. Opponents object that the potential for an environmental disaster outweighs any limited advantages it might offer the country. State-run Vietnamese company Vinacomin (Vietnam National Coal & Mineral Industries Group) has built an alumina factory & is preparing for major mining operations in Lam Dong & Dak Nong provinces with the aim of reaching an output of ~ 6 million tonnes per year by 2016.

21 Tan Rai (Lam Dong) Alumina smelter Vietnam (NASA) Exposed bauxite Cujut district, Dak Nong Province Oolitic bauxite at Dak Nong Province

22 Vietnam Bauxite Deposits & Reserves Deposits 1.Dong Van Group 32 2.Tap Na Group 23 3.Lang Son Group 16 4.Konhanung deposit Mang Den Van Hoa 24 7.Ist May Nhan Co 78 9.N. Gia Nghia Trung Duc Bao Loc Tan Rai Duc Bon Duc Huu Thong Nhat 89 Reserves (Millions MT) Residual deposits. Future potential near China border Potential exports? Main current activities Based on lateritic bauxite (*Tonnes rounded) Source: Dr Tran Kim Phuong

23 Dac Nong Province Bauxite Ore Quality & Reserves Major current activities include bauxite mining, alumina processing & in 2016 aluminium metal production Clean ore c.f. crude ore ~44% Source: Dr Tran Kim Phuong

24 Lam Dong Province Bauxite Ore Quality & Reserves Low overburden ratio Al2O % Low silica % Suitable for Bayer process (low temp) Source: Dr Tran Kim Phuong

25 Asia - a growth centre for Bauxite Global aluminium production to increase by ~25 Mtpa over 15 years. Of this around 68% or 18 Mtpa will occur in Asia. Of the incremental Asian aluminium supply, 13.5 Mtpa is expected from China, 2.3 Mtpa from India and the ~2.2Mtpa from S.E.Asia. Leading projects include Vietnamese smelter (300 to 450 ktpa) at Nhan Co. Source: CRU, Hydro

26 Malaysia bauxite driving cost deflation

27 Comparison to Bauxite Mining in Kuantan, Pahang, Malaysia Screening improves quality by reducing the amount of silica in the product.

28 Malaysian bauxite exports ~ 1.2 million t /month According to a recent report, Malaysian bauxite exports could grow to 8-10 million tpa. Reserves of bauxite in Malaysia could be exceed ~ million tonnes. More reserves could be opened up over many years as the palm oil trees are periodically replanted in cycles. However, some commentators predict the exports may decline after Only time will tell. Most Malaysian bauxite deposits are currently under palm oil plantations. Compare with farmland including coffee and forest crops in Vietnam

29 Environmental Issues with bauxite cartage & red mud Strong opposition from local farmers & green groups Local objection to Chinese involvement & workers Mud on roads during wet months / Dusty roads in dry months Overloaded trucks damaging highways Many trees & forests destroyed to make way for bauxite mining Fear of red mud dam leakage / flood (as in Hungary) In 2010, Giáp became a prominent critic of bauxite mining in Vietnam following government plans to open large areas of the Central Highlands to the practice. Giáp indicated that a 1980s study led experts to advise against mining due to severe ecological damage and national security. He died in 2013 aged 102.

30 Dac Nong Aluminium Smelter being constructed Started construction in Sept 4th hectare site Investment by Tran Hong Quan Metallurgy Ltd Company Approximately $US564 million investment. Goal is to add value to the local bauxite resources Initial capacity of 300,000 tpa aluminium (due late 2016) Planned expansion to 450,000 tpa aluminium (late 2019) Alumina supplied from: 1. Nhan Co (Dac Nong) 2. Tan Rai alumina (Lam Dong) Anticipated receipts are $US 1.35 billion / year

31 Dac Nong Ground-breaking ceremony Vietnam s first aluminium metal smelter underway at Nhan Co Industrial Park, Dak R'lap district, Dac Nong province This is a national priority project, confirming the vision of the Government in the approval of zoning plan for exploration, exploitation, processing & use of bauxite ore in the period of ; a vision towards 2025 will bring many practical meanings, contributing to raising the awareness, culture, national defence, social order in local level & Central Highlands

32 Ranking of Supplier Options Source Politics Logistics Quality Reserves Total Australia Malaysia Vietnam India KEY: 3 = best 2 = intermediate 1 = challenging Logistics includes: transport, infrastructure & length of supply chain

33 Acknowledgments Metal Bulletin SME & AME Dr Tran Kim Phuong Dr Richard Flook Dovina (importer) Aluminum Rod Modern production line Aluminium casting line Electrical cable Aluminium fabricator Drawing of wire etc Also copper & plastic

34 Thank you