Bauxite Commodity Report

Bauxite Commodity Report

Use of Commodity

 Bauxite is a sedimentary rock primarily composed of aluminum hydroxide minerals including gibbsite, boehmite, and diaspora, with mixtures of silica, iron oxide, titania, aluminosilicate, and other impurities (United States Geological Survey, n.d, a). Due to its high enrichment of aluminum and low content of impurities, bauxite is the world’s primary source of aluminum metal (Banks, 1979). Aluminum is one of the most widely used metals in the world attributed to its abundance and distinct physical and chemical properties. It has great electrical conductivity and malleability. It is quite light weighing only around one-third of steel or copper but with good corrosion resistance and durability, making it an important material in transportation and construction industries. It is also widely used in packaging because it is infinitely recyclable (Government of Canada, 2018). Bauxite is also the primary source of gallium, a by-product of mining and processing of aluminum ores. Gallium’ abundance in the crust is less than 19 ppm, and it has a higher concentration in bauxite ores at around 50 ppm due to element substitutions (United States Geological Survey, n.d, b). Gallium is a very substantial material in microelectronic components including light-emitting diodes (LEDs), laser diodes, photodetectors, and solar cells, widely used in telecommunications and aerospace industries.

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Prices

 Bauxite was firstly discovered by French geologist Pierre Berthier in the village Les Baux-de-Provence in 1821, and aluminum metal was firstly isolated in 1825 by Hans Christian Oersted (Bray, 2012). In the early years, most of the aluminum was produced experimentally, and the processes were costly and complicated, making its price even higher than that of silver. After 1886 when the Hall-Heroult process was developed and applied, aluminum production became commercial and expanded rapidly, leading to decreasing aluminum price. In the early 20th, the price of aluminum was kept low to compete against copper in the electrical industry. After World War II, aluminum was largely used in construction and transportation industries, expanding its production, and aluminum price showed a decreasing trend due to technological advancement. According to Bray (2012), the aluminum price reached the low- to mid- $0.20/pound range in the 1960s. In the 1970s, attributed to increasing demands and rising production costs for primary aluminum, aluminum recycling industry developed rapidly (Schlesinger, 2013). Aluminum entered the London Metal Exchange in 1978, and its price fluctuation was associated with the exchange rates of the currency. From late 1970s, prices of energy including electricity generation increased due to the surge of energy demand in fast-growing countries, leading to gradual increase in primary aluminum price and the shift of primary aluminum production centres from high costs countries such as United States, French, and Germany to relatively low costs countries such as Australia, Canada, and China.

According to Nappi (2013), the current price of primary aluminum largely depends on variations in energy prices. For example, China produces low-priced aluminum because it has relatively cheap and abundant energy sources and advantageous policies to lower aluminum production costs. Although aluminum is a US-dollar based commodity, its price is not related much with industry fundamentals as most production and consumption occurs outside the United States. Aluminum price fluctuated between $0.500 and $1.000/pound from the 1990s until now (Bray, 2012). Based on data provided by the London Metal Exchange, the aluminum price fluctuated around $1850/tonne in February 2019.

Geological Setting

 Bauxite is a kind of terrigenous (derived from land) material generated from the extreme chemical weathering of aluminum-rich rocks. Parent materials of bauxite are typically rocks containing a relatively high content of aluminous silicates, varying from igneous rocks including granite and basalt, metamorphic rocks including gneiss and migmatite to sedimentary rocks including shale and Al-rich limestone (ALS Global, 2017). Under tropical or subtropical climates, Al-rich clays generated from parent rocks are leached by meteoric water, during which process mobile elements are removed, leaving relatively immobile aluminum in situ with silicon and iron. Two types of bauxite deposits, lateritic bauxite and karstic bauxite, are identified based on different parent materials and weathering processes involved. Lateritic bauxite is mostly generated from aluminous silicate rocks such as granite and gneiss through leaching, primarily composed of gibbsite or a mixture of gibbsite and boehmite. Karstic or carbonate bauxite is produced through the chemical weathering of carbonate rocks which contain disseminated Al-rich clay layers. Karstic bauxite forms when chemically weathered clays are washed and accumulated into eroded limestone cavities, and it is typically composed of diaspore. Lateritic bauxite accounts for most of the bauxite deposits in the world (ALS Global, 2017).

 Bauxite deposits are generally quite extensive and distributed widely around the world. Some large economic bauxite ores occur in Guinea, Australia, Brazil, Vietnam, Jamaica, Indonesia, China, India, Guyana, and Greece, which also contribute to most of the world’s bauxite mine production. According to Harder (1949), bauxite ore deposits of economic significance normally formed in Medial Cretaceous, Late Cretaceous, Early Eocene, Miocene, Pleistocene, and Recent age, including Miocene bauxite in Jamaica, deposits of late Tertiary and Pleistocene in Guyana, Brazil, Australia, and India, and Carboniferous and Permian bauxite in China. Bauxite deposits typically represent non-depositional intervals, and form within plateaus developed from eroded original bedrocks or sediments. Bauxite seams have various thickness, ranging from a few meters to up to 25 meters, the thickest one for Sangaredi which is the largest bauxite deposit in the world (Abzalov & Bower, 2014). Bauxite layers can have diverse textures including loose or cemented pisolites, tubular or massive bauxite with cavities, and nodular bauxite. They also contain various alumina, silica, and iron contents. Different textures and chemical compositions reflect different weathering conditions including changing parent materials and climates (temperature and precipitation) (Harder, 1949).

Occurrences/Potential in Canada and Ontario

 According to United States Geological Survey (Patterson, 1967), warm to hot and humid climates are critical for the formation of bauxite. Due to the lack of proper depositional environments, Canada does not have bauxite ore deposits. Thus there is no bauxite mined in Canada (Natural Resources Canada, 2018).

 However, Canada is one of the largest aluminum producing countries in the world, ranking after China and Russia. Quebec is the major aluminum producer in Canada with one alumina refinery and nine primary aluminum smelters, representing nearly 60% of North American Capacity. British Columbia also contributes to aluminum production with one primary aluminum smelter (Natural Resources Canada, 2018). In 2017, Canada produced about 3,212 thousand tonnes of primary aluminum and exported aluminum products valued at $12.7 billion.

References

Abzalov, M., & Bower, J. (2014). Geology of bauxite deposits and their resource estimation practices. Applied Earth Science (Transactions of the Institution of Mining and Metallurgy, Section B), 123(2), 118-134.

ALS Global. (2017). Bauxite. Retrieved from: https://www.alsglobal.com/-/media/als/resources/services…/bauxite-technical-note.pdf

Banks, F. (1979). Bauxite and aluminum: An introduction to the economics of nonfuel materials. Lexington, Mass.: Lexington Books.

Government of Canada. (2018). Natural Resources Canada: Aluminum facts. Retrieved from: https://www.nrcan.gc.ca/mining-materials/facts/aluminum/20510

Harder, E. C. (1949). Stratigraphy and Origin of Bauxite Deposits. GSA Bulletin. 60 (5): 887–908. doi: https://doi.org/10.1130/0016-7606(1949)60[887:SAOOBD]2.0.CO;2

London Metal Exchange. (2018). LME Aluminum. Retrieved from: https://www.lme.com/Metals/Non-ferrous/Aluminium#tabIndex=1

Nappi, C. (2013). The global aluminium industry 40 years from 1972 [Report]. International Aluminium Institute. Retrieved from: http://large.stanford.edu/courses/2016/ph240/mclaughlin1/docs/nappi.pdf

Natural Resources Canada. (2018). Aluminum Facts. Retrieved from: https://www.nrcan.gc.ca/mining-materials/facts/aluminum/20510

Patterson, S. H. (1967). Bauxite reserves and potential aluminum resources of the world. U.S. Geological Survey Bulletin 1228, 176 p.

Schlesinger, M. E. (2013). Aluminum Recycling (2 ed.). CRC Press. pp. 2–6. ISBN 978-1-4665-7025-2.

Bray, E. L. (2012). Metal Prices in the United States Through 2010: Aluminum (Al) [Report]. United States Geological Survey. Retrieved from: https://pubs.usgs.gov/sir/2012/5188/sir2012-5188.pdf

United States Geological Survey. (n.d, a). Bauxite and Alumina Statistics and Information. Retrieved from: https://www.usgs.gov/centers/nmic/bauxite-and-alumina-statistics-and-information?qt-science_support_page_related_con=0#qt-science_support_page_related_con

United States Geological Survey. (n.d, b). Gallium – A Smart Metal. Retrieved from: https://pubs.usgs.gov/fs/2013/3006/pdf/fs2013-3006.pdf