VBX has entered into a bauxite offtake and investment framework agreement with a Hong Kong unit of a Chinese aluminium industry group.
The agreement outlines intentions for the two parties to negotiate the terms of a potential investment by the Chinese Group for the development and operation of the Wuudagu bauxite project in northern Western Australia.
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The framework also contemplates the Chinese Group purchasing an agreed volume of bauxite from Wuudagu, which is expected to range between two and three million tonnes per annum.
Pricing for the bauxite products would be set using an agreed market reference price index, with adjustments for product quality.
VBX and the Chinese Group plan to use commercially reasonable endeavours to negotiate on a non-exclusive basis, the terms of this investment and related arrangements.
Any final agreement would remain subject to the successful negotiation and execution of full-form contracts, which are expected to be completed within 90 days following the delivery of a definitive feasibility study for the Wuudagu project.
The agreement further indicates that the Chinese Group’s investment is intended to cover a significant portion of the construction and commissioning costs associated with the Wuudagu mining operation.
In addition to the Wuudagu project, VBX and the Chinese Group will explore potential collaboration on other bauxite assets in Northern Australia.
These may include future investments, product offtake arrangements or advance payment structures relating to projects such as VBX’s Takapinga bauxite project in the Northern Territory.
The Wuudagu bauxite project is situated roughly 15km west of Kalumburu, within the Shire of Wyndham East Kimberley.
VBX founder and managing director Ryan de Franck said: “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.”
