Tags: bauxite | aluminum | ebola | Africa

Bauxite Supply From Africa Seen Resilient Amid Ebola Battle

Thursday, 30 October 2014 10:16 AM

Bauxite exports from West Africa are holding up, according to the International Aluminium Institute, as the region that ships about a fifth of seaborne supplies tackles the worst outbreak of Ebola on record.

“There’s no indication at this stage that there’s been any impact on any shipments from that region,” Ron Knapp, secretary-general of the International Aluminium Institute, said in an interview. “We’re optimistic, positive that this is a short-term issue. It will be resolved.”

The spread of the disease this year spurred concern that exports of the raw material used to feed the aluminum industry may be disrupted, with BNP Paribas SA among banks highlighting the potential risks of supply interruptions and surging prices. Africa’s importance as a bauxite producer rose since January, when Indonesia banned ore exports. The United Nations is seeing some progress in its effort to contain the outbreak, according to Anthony Banbury, head of the UN’s mission against the virus.

“We’re less concerned about bauxite disruptions at this stage than other, much more concerning elements,” Knapp said in Singapore yesterday, without giving production figures for the region. “The industry is concerned for the health and well- being of not only the employees, health workers but also the local communities, and the economic and financial hardship.”

The members of Knapp’s London-based institute represent more than 60 percent of global bauxite, alumina and aluminum production, according to its website. Bauxite is mined near the surface and refined into alumina, which is further processed into the lightweight metal used in cans and window frames.

Deadly Virus

More than 13,700 people have fallen ill with the virus in Guinea, Liberia and Sierra Leone, with more than 4,900 deaths, according to the World Health Organization. The virus spreads from contact with bodily fluids. There were also cases in the U.S., where President Barack Obama said in September that the disease posed a potential global security threat.

As much as 20 percent of global aluminum output may be lost in a worst-case scenario, where African bauxite is unavailable because of Ebola and Indonesia’s ban remains, BNP Paribas said in an Oct. 16 report. Even a smaller disruption may spur prices, wrote Kunal Agrawal, a BNP analyst. Guinea, Ghana and Sierra Leone account for 20 million tons of global seaborne bauxite supply, or 20 percent of the total, according to the bank.

‘Created Problems’

The outbreak “has created problems, as far as Guinea mining exploration companies are concerned, a lot of them will remain static,” said James Lumley, chief executive officer of Anglo African Minerals Plc, which is seeking to develop bauxite assets in the region. “I believe production is still at the same levels as before, so it hasn’t been affected too much,” Lumley told a metals conference in Singapore yesterday.

While the UN has seen some progress in its push to contain Ebola, the effort is still short of money and trained workers, the UN’s Banbury said yesterday in Accra, Ghana. There’s still a shortage of supplies, including soap and money, Samantha Power, U.S. Ambassador to the UN, said yesterday.

“There’s a concern that perhaps the rest of the world was asleep at the wheel when this occurred,” said Knapp, who addressed the metals conference in the city-state. “I think we’ve all learned valuable lessons as a result.”

Indonesia banned ore exports in January to spur investment in processing, and the government said yesterday that the curb will be kept in place. The Asian country accounted for about 18 percent of global bauxite production in 2013 and was the largest supplier to China, according to Citigroup Inc.

The global bauxite market will swing to a deficit of about 6.3 million tons this year from a surplus of 49.3 million tons in 2013, according to Citigroup. China may face a bauxite gap next year, Alumina Ltd. told the conference.

“With little excess supply in the seaborne market, Chinese importers will be looking across the globe for replacement volumes for what has been lost from Indonesia,” Joel Crane, an analyst at Morgan Stanley, said from Melbourne today. “With Ebola risk, I fear Guinea will not be the answer to China’s bauxite shortage.”

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Bauxite exports from West Africa are holding up, according to the International Aluminium Institute, as the region that ships about a fifth of seaborne supplies tackles the worst outbreak of Ebola on record.
bauxite, aluminum, ebola, Africa
Thursday, 30 October 2014 10:16 AM
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