Page 6 - Bauxite Resources Annual Report 2014

REVIEW OF OPERATIONS
CORPORATE FOCUS
During the year the Company focused
on the development of its bauxite
interest in Western Australia with the
objective of commercial development of
bauxite and alumina capacity to support
a developing market in China.
Achievements during the year include:
• Exceptional resource growth of 56%
to 380 Million Tonnes
• Commencement of Scoping and
Market Evaluation studies on the
Fortuna Deposit
• Maiden Resources announced for
Athena and Dionysus Deposits
• Significant reduction of non-
prospective tenement holdings
reducing tenure from 17,710km2
to 7,905km2
• Successful cash conservation
strategy achieved cash balance at
end of year of $40.9 Million
MARKET
Sentiment in global aluminium markets
improved significantly during 2013/2014
with physical shortages of aluminium
leading to historically high premiums.
General consensus in the market place is
the supply demand balance is in deficit or
at best balanced, however the profitability
of many aluminium producers has been
challenged by high energy costs. Chinese
aluminium producers have seen a
marked change with high cost inefficient
older smelters closing down making way
for a new wave of cleaner, efficient low
cost producers.
The development of the Chinese
aluminium industry has come at the
same time as a slowing in the growth
of the Chinese economy, dropping from
the high levels of the previous 10 years
of around 10% to an estimated 7-7.5%
per annum. Still an impressive result in
current global conditions and coming off
a high growth base in dollar terms a 7%
growth is in fact greater than it was when
growing at 10% five years ago. Chinese
government urbanisation targets remain
high with an estimated 100 million people
expected to move to cities over the
period through to 2020. It is anticipated
that this will drive significant construction
growth and aluminium use in Chinese
construction compared to other global
economies over the coming years.
“The Company believes it is well placed to be one of the
leading developers of bauxite mining in the coming years
due to its substantial resources close to existing rail and
port infrastructure.”
4 | Bauxite Resources Annual Report 2014