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Alcoa inks supply deal on Australian bauxite, secures 5-year export permit

Alcoa Corp. joint venture Alcoa World Alumina and Chemicals, or AWAC, secured its first major third-party contract to supply about 400,000 bone dry tonnes of bauxite from its Huntly mine in Western Australia, the company said on Dec. 19.

The contract, together with other two other agreements the company recently signed, is worth US$126 million, with 2.2 million tonnes of bauxite slated for delivery to Chinese customers in 2017.

Alcoa will also supply bauxite from its two Brazil-based operations, the Juruti mine and the 18.2%-owned Mineracao Rio do Norte property, which is operated by Vale SA.

The miner noted that the two contracts will replace its 2016 contract volumes and will increase the total value of its 2016 and 2017 third-party bauxite supply agreements to about US$600 million.

In addition, the Western Australian government granted approval for Alcoa to export up to 2.5 million tonnes per annum of bauxite for five years to third-party customers.

The AWAC joint venture is owned 60% by Alcoa and 40% by Australia's Alumina Ltd.