Australian Bauxite Limited (ABx) has finalized and executed an offtake agreement with Rawmin Mining and Industries Pvt Ltd of Mumbai, India, which covers all bauxite it produces out of Tasmania for five years.
The agreement provides for Rawmin to purchase a total of 4.7 million wet metric tonnes (WMT) of bauxite commencing with 200,000 WMT to March 31, 2016, and ramping up to 1.5 million WMT per annum from April 1, 2018.
Sale is on a Free on Board Stowed and Trimmed (FOBST) basis, with Rawmin responsible for shipping, based on best-price tenders secured by either party.
ABx’s first shipment of Tasmanian bauxite is now at port side and ready for loading.
The offtake agreement provides for payments linked to the CBIX Price, which is an index of the market price prevailing at the time of sale. Bauxite in excess of the contracted quantities must be first offered to Rawmin.
The agreement further provides for blended shipments of ABx and Rawmin bauxites on a profit share basis for any blending profits achieved. It includes terms and conditions and mutual warranties and indemnities customary to this type of agreement.
Rawmin’s associate companies own bauxite mines in Jamnagar and Porbandar districts of Gujarat State in India. In addition, a greenfield bauxite mining project is being set up in Maharashtra state.
Rawmin will provide assistance with sufficient working capital finance, production and best practice quality control. Bauxite will be sold at market prices into China, India, the Middle East and Australia.
Rawmin’s managing director Mahesh Thanki said, “Rawmin is pleased to have concluded this offtake agreement with Australian Bauxite and we are sure that the years ahead will be productive and profitable to all concerned.”
ABx’s CEO Ian Levy said, “The synergies between Australian Bauxite and Rawmin arise from the compatibility of our type of bauxite and will be of considerable benefit to our shareholders. The offtake agreement provides us with certainty and enables us to confidently expand our operations.