VBX signs bauxite offtake and investment framework agreement with Hong Kong unit of Chinese aluminium group

Author: Shree Mishra Source: Mining Technology

VBX has entered into a bauxite offtake and investment framework agreement with a Hong Kong-based unit of a Chinese aluminium industry group.

Key Terms of the Agreement

• The framework outlines intentions for both parties to negotiate terms for a potential investment by the Chinese Group in the development and operation of the Wuudagu bauxite project in northern Western Australia.
• The Chinese Group is expected to purchase an agreed volume of bauxite from Wuudagu, projected to range between two and three million tonnes per annum.
• Pricing for bauxite products will be determined using an agreed market reference price index, with adjustments for product quality.

Next Steps

• VBX and the Chinese Group will use commercially reasonable endeavours to negotiate, on a non-exclusive basis, the terms of the investment and related arrangements.
• Any final agreement remains subject to the successful negotiation and execution of full-form contracts, expected to be completed within 90 days following delivery of a definitive feasibility study for the Wuudagu project.

Investment and Collaboration

• The Chinese Group's investment is intended to cover a significant portion of the construction and commissioning costs associated with the Wuudagu mining operation.
• Beyond Wuudagu, VBX and the Chinese Group will explore potential collaboration on other bauxite assets in Northern Australia, including:
• Future investments
• Product offtake arrangements
• Advance payment structures
• These may relate to projects such as VBX's Takapinga bauxite project in the Northern Territory.

Project Location

The Wuudagu bauxite project is located approximately 15 km west of Kalumburu, within the Shire of Wyndham East Kimberley.

Executive Comment

VBX founder and managing director Ryan de Franck stated:

"Wuudagu's attractive low-silica product quality, short and efficient logistics, expanding scale and northern Australian location are highly desirable attributes for a bauxite supply source in the global aluminium industry."

"VBX has made a conscious decision to retain all rights to future products produced at Wuudagu and to seek to use these rights to provide an attractive funding solution to construct and commission the project."

This article was originally created and published by Mining Technology, a GlobalData owned brand.