How ABx’s $10.2m Deal with GII Could Transform Queensland and NSW Bauxite Mining

Strategic Partnership to Unlock Bauxite Potential

ABx Group Limited (ASX, ABX) has taken a decisive step forward by securing a strategic investment agreement with Good Importing International (GII), an experienced bulk commodities investor. The deal involves GII investing up to $5.4 million to acquire a 75% interest in ABx’s Sunrise Bauxite Project in Queensland, with an additional exclusive option to invest $4.8 million for a similar stake in the Taralga and Penrose bauxite projects in New South Wales.

This partnership comes at a time when global bauxite markets are experiencing heightened volatility. Supply disruptions from Guinea and China have driven prices higher, creating a favourable environment for new producers to enter the market. ABx’s Managing Director, Dr Mark Cooksey, highlighted the opportunity to capture value amid these conditions and praised GII’s expertise in financing and securing offtake arrangements.

Sunrise Project, Leveraging Infrastructure for Faster Production

The Sunrise Bauxite Project boasts a JORC-compliant resource of 37 million tonnes of metallurgical-grade bauxite. ABx and GII have jointly updated the project design to utilise common user infrastructure at Bundaberg port, managed by Gladstone Ports Corporation. This approach significantly reduces both capital expenditure and the timeline to production compared to earlier plans.

The investment will be staged, an initial $2.7 million injection will fund final regulatory approvals, land access, and mine planning over 12 to 24 months. Upon successful completion, a further $2.7 million will be deployed to cover land acquisition and infrastructure construction, expected to take just three months. Governance arrangements will see GII holding majority board representation in the project’s operating subsidiary, ABx3 Pty Ltd.

Taralga and Penrose Projects, Option to Expand Footprint

In New South Wales, the Taralga and Penrose projects offer complementary opportunities. Taralga holds a 38 million tonne resource of metallurgical bauxite, while Penrose contains refractory-grade bauxite, commanding higher prices due to its specialised industrial uses. GII holds a 9-month exclusive option to invest $4.8 million for a 75% stake in these projects, contingent on the Sunrise project’s initial milestones.

Recent improvements in Port Kembla’s logistics have revived the feasibility of exporting from these inland deposits, prompting ABx to reassess the projects’ commercial potential. Should GII exercise the option, similar shareholder agreements to those at Sunrise will govern the partnership.

Tasmanian Projects Remain a Separate Focus

Notably, GII’s investment does not extend to ABx’s bauxite projects in Tasmania. ABx continues to pursue selective production of cement and fertiliser-grade bauxite there, aiming for profitability and environmental stewardship. The company plans to restart mining at the DL130 project near Launceston, although this is subject to ongoing regulatory appeals.

Overall, this strategic investment deal marks a pivotal moment for ABx, enabling it to accelerate development of its key bauxite assets while retaining control over its Tasmanian operations. The collaboration with GII brings not only capital but also valuable expertise in bulk commodity markets, positioning ABx to respond agilely to evolving global supply dynamics.