Metro Mining secures a longer runway for bauxite shipments

Shipments recover despite terminal and channel disruptions

Metro Mining Limited (ASX:MMI) shipped 2.114 million wet metric tonnes of bauxite in the September quarter, 17% more than in the June quarter, despite a major maintenance shutdown, workforce constraints and a deteriorating barging channel. The result was stronger sequentially, but still below the company’s expectations and left full-year shipment guidance at 6.0-6.5 million WMT.

The quarter included a one-week shutdown at the Ikamba offshore floating terminal to replace four hydraulic crane cylinders. Metro used geared vessels and its own crews to keep ship-loading moving, while further crane issues affected operations in August. Channel depth later fell to 1.3 metres after erosion and the migration of a sand bank into the channel buffer zone. The company says bed-levelling began in early October and had restored depth to 1.6 metres by the time of the report.

Revised guidance leaves Q4 carrying the burden

The revised target had already been disclosed on 19 October, after September performance fell short of plan. It now frames the final quarter: Metro must convert improved channel access, better staffing and terminal availability into enough volume to reach the lower end of the range. The company had previously pointed to channel repairs, workforce improvements and drier conditions as part of its recovery plan in its October guidance reset.

CEO and managing director Simon Wensley said the operational issues had been mitigated and that Metro was prepared to use available loading windows in January if conditions allowed. That is a forward-looking management statement rather than a guaranteed production outcome, with the marine system still exposed to channel conditions, vessel availability and equipment reliability.

Higher prices improve margins, but costs remain elevated

Market conditions helped Metro’s realised CIF pricing rise to A$60.8 per WMT from A$57.1 in the June quarter. In US dollar terms, CIF pricing was 9% higher, while exchange-rate movements limited the Australian dollar improvement to 6.5%. Fourth-quarter customer pricing has been agreed at US$2-US$4 per dry metric tonne above the third quarter, broadly following the market’s direction.

That improvement did not flow fully into the FOB margin, which slipped to A$43.4 per WMT from A$43.9. Metro said the margin was affected by smaller geared vessels, demurrage, a weaker US dollar and the final cargo under a 2022 fixed-price expansion contract. Site costs improved from the previous quarter to A$30.3 per WMT, but remained A$4.6 per WMT above the corresponding 2025 quarter, reflecting diesel, labour, equipment and stripping costs. Site EBITDA consequently improved to A$7.0 per WMT from A$4.4, but remained well below the A$16.1 recorded a year earlier.

Offtake contracts add volume visibility through 2029

Metro has agreed two binding offtake contracts with existing customers covering a combined 4.5 million WMT a year for 2027 to 2029. The company linked the agreements to improved grade stability and customer trials during 2026. The contracts provide a degree of future volume visibility, although the filing does not disclose pricing, margins or other commercial terms.

The market backdrop was mixed. Bauxite prices continued to rise, with Metro citing freight disruption, reduced Guinea shipments and potential export restrictions in Guinea. Outside China, alumina markets tightened and prices rose, while Chinese alumina supply remained more ample. Metro has also extended longer-term freight arrangements to reduce exposure to volatile charter and bunker costs.

Mobile screening project moves into implementation

Metro’s dry-screening trials produced an indicative product grade of 50-52% alumina and 11-12.5% silica from feed containing 47-50% alumina and 16-20% silica, with recovery of about 60%. Those results led the board to approve Phase 1 of a mobile screening strategy, with two Finlay screens procured and mobilised to site.

The company is targeting combined feed rates of 600-800 WMT per hour as the equipment ramps up, with a longer-term aim of producing 5,000-10,000 tonnes a day from three screening plants. The proposed approach is designed to improve handling in wet conditions, create additional product options and potentially support resource-to-reserve conversion. Those benefits remain dependent on commissioning, operating performance and future wet-screen trials, including a planned hybrid-screen trial in the first quarter of 2027.

Debt falls as cash generation turns positive

Metro generated A$10.6 million of net operating cash flow during the quarter, while cash and equivalents ended at A$16.8 million. It repaid A$9.4 million of borrowings during the period, reducing secured debt to US$24.8 million, or A$35.6 million in the reported conversion. The remaining facility with Nebari Partners carries interest at SOFR plus 7% and matures on 31 December 2027.

The company’s proposed 5% on-market share buy-back has not begun and remains under board review. Metro also reported groundwater-quality non-compliances against a state environmental authority condition, describing the exceedances as consistent with historical seasonal trends. A separate delay in covering an overland conveyor was attributed to supplier delays; the work has since been completed and the regulator notified. Neither issue was quantified in terms of potential financial consequences, leaving execution, compliance and cash conversion as important tests alongside the revised shipment target.