Metro Mining Ltd (ASX:MMI) has signed a new binding contract with China’s state-owned State Power Investment Corporation Aluminium and Electric Power Investment Co. Ltd (SPIC).
The contract is for 300,000 tonnes +/- 10% of bauxite to be delivered in calendar year 2018 and follows a trial vessel previously delivered to SPIC.
The contract is based on market pricing with typical bonus and penalty clauses associated with product specifications.
READ: Metro Mining named Australia’s leading emerging mining company
Metro’s Managing Director Simon Finnis said: “We are delighted to have finalised a new off-take agreement with SPIC, who have the capacity to be another long term off-take partner and to have successfully sold all of Metro’s planned 2018 production.
"This year shipments will be made to five different Chinese customers confirming strong demand for Metro bauxite in China.
“We are experiencing particular interest from refineries located in the inland provinces where supply of domestic bauxite has been hindered by recent mine closures and environmental audits.
“Our product specifications are well suited to their processing requirements.”
Demand exceeds current availability
Finnis added: “Production at the Bauxite Hills Mine is steadily increasing, and we are confident of reaching production guidance for this year.
“Given current demand we are actively looking at ways to increase 2019 production above the current planned rates.”
Bauxite Hills production guidance this calendar year is 1.90 to 2.075 million tonnes.
Argonaut forecasts 40 cent price target
Last month, Perth-based broker Argonaut released a research report pertaining to Metro with a Buy recommendation and 40 cent target price.
This is more than double the current price of 19 cents, suggesting significant potential upside.