Bauxite is the main raw material used in the commercial production of alumina (Al₂O₃) and aluminium metal, although some clays and other materials can be utilised to produce alumina. Bauxite is a heterogeneous, naturally occurring material of varying composition that is relatively rich in aluminium. The principal minerals in bauxite are gibbsite (Al₂O₃.3H₂O), boehmite (Al₂O₃.H₂O) and diaspore, which has the same composition as boehmite, but is denser and harder.

Australia is the world's largest producer of bauxite, representing 30% of global production in 2012. The large bauxite resources at Weipa with more than 3000 million tonnes (Mt) in Queensland (Qld) and Gove (>200 Mt) in the Northern Territory (NT) have average grades between 49 and 53% Al₂O₃ and are amongst the world's highest grade deposits. Other large deposits (each >500 Mt) are located in Western Australia (WA) in the Darling Range, the Mitchell Plateau and at Cape Bougainville, of which the latter two have not been developed. The bauxite mines in the Darling Range have the world's lowest grade bauxite mined on a commercial scale (around 27-30% Al₂O₃). Despite the low grade, the mines accounted for 23% of global alumina production as they also have low reactive silica, making the bauxite relatively easy to refine. Bauxite resources also occur in New South Wales (NSW) and Tasmania (Tas) but these are small (<25 Mt).

More than 85% of the bauxite mined globally is converted to alumina for the production of aluminium metal. An additional 10% goes to non-metal uses in various forms of specialty alumina, while the remainder is used for non-metallurgical bauxite applications. In most commercial operations, alumina is extracted (refined) from bauxite by a wet chemical caustic leach process known as the Bayer process. Alumina is smelted using the energy-intensive Hall-Heroult process to produce aluminium metal by electrolytic reduction in a molten bath of natural or synthetic cryolite (NaAlF₆).

Australia's aluminium industry is a highly integrated sector of mining, refining, smelting and semi-fabrication centres and is of major economic importance nationally and globally. The industry is becoming less vertically integrated, however, largely because of the rise of independent smelters, particularly in China.

In 2012, the Australian industry consisted of:

• Five long-term bauxite mines at Weipa; Gove; Huntly, Boddington and Willowdale (Figure 1);
• Seven alumina refineries at Gove, Yarwun; QAL, Kwinana, Pinjarra; Wagerup and Worsley (Figure 1);
• Five primary aluminium smelters (previously six before the 2012 closure of Kurri Kurri, NSW) at Bell Bay, Boyne Island, Tomago, Portland and Point Henry (Figure 1);
• Twelve extrusion mills located in NSW, Victoria, South Australia, Qld and WA; and
• Two rolled product plants producing aluminium sheet, plate and foil in Victoria.

The industry in Australia is geared to serve world demand for alumina and aluminium with more than 80% of production exported. Transport, packaging, building and construction provide much of the demand for the metal in Australia.

Economic Demonstrated Resources (EDR) of bauxite were 6281 Mt at December 2012 (Table 1), up from 5665 Mt in 2011.  Queensland holds 61% of EDR, WA 35% and the Northern Territory 4%.

Australia's subeconomic resources of bauxite totalled 1573 Mt, down from 2055 Mt in 2011, and Inferred Resources totalled 1474 Mt (Table 1), up from 1120 Mt in 2011.

Table 1: Austrlalia's resources of bauxite and world figures as at December 2012

Figure 2 shows that prior to 1988 bauxite EDR was around 3000 Mt and then rapidly increased in 1989 with the delineation of additional resources on Cape York Peninsula in Qld ('a' in Figure 2). In 1992, bauxite EDR decreased as a result of the reclassification of some resources on Cape York Peninsula to comply with requirements of the Joint Ore Reserve Committee (JORC) Code ('b' in Figure 2). Since 1992, Australia's bauxite EDR has steadily increased and in recent years has remained steady at around 6000 Mt.

About 95% of Australia's EDR of bauxite is accessible for mining. Some areas within Darling Range mining leases in WA are not available for environmental reasons.

By end of December 2012, JORC Code Reserves in the Proved and Probable Reserve categories comprised 2145 Mt of bauxite, accounting for approximately one third of accessible EDR with the remainder defined as Measured and Indicated Resources. These proportions are almost unchanged from 2011.

Data on exploration expenditure for bauxite are not available in published statistics. The bulk of drilling is associated with brownfield occurrences close to existing infrastructure. However, smaller exploration projects away from the big five mines are scattered through the Darling Range in WA and along the east coast of Australia.

Australian Bauxite Limited has exploration projects in Qld, NSW and Tas with the bulk of recent efforts directed towards the Tasmania Project where the company continued its drilling program in 2013, with particular focus on mine boundary definition and the identification of new targets.

On the west coast, Bauxite Australia Limited upgraded its Fortuna deposit in WA with an exploration program comprised of 302 vertical holes totalling 2857 metres across an area of approximately 385 hectares on a nominal 160 x 80 metre drill pattern. The company completed an additional 220 vacuum drill holes at Fortuna in June and July 2013. It also scheduled a drilling program for its Felicitas deposit comprising 6029 holes for a total of 28 662 metres. The program covered some 3300 hectares on an 80 x 80 metre spacing and two upgraded resources were announced in May 2013.

In Qld, Gulf Alumina Limited further explored the Skardon River deposit with a drilling program in late 2012 comprising 128 holes for a total of 484 metres. About 111 holes were drilled through bauxite into clays and 1602 samples were screened and assayed with an upgraded resource announced in March 2013.

Australia was the leading producer of bauxite (Table 2) globally in 2012, the second largest producer of alumina and the fifth largest producer of aluminium. Indonesia was the largest exporter of bauxite because the majority of Australian bauxite is processed within Australia to alumina and aluminium.

Table 2: World production for bauxite.

Source: United States Geological Survey and the Bureau of Resources and Energy Economics; Percentages are rounded so might not add up to 100% exactly.

Based on data from the Bureau of Resources and Energy Economics, bauxite production totalled 76.281 Mt in 2012 (up from 70.231 Mt in 2011; Figure 3), alumina production totalled 21.357 Mt (up from 19.399 Mt in 2011; Figure 4) and aluminium production totalled 1.864 Mt (down from 1.95 Mt in 2011; Figure 5). The closure of the Kurri Kurri smelter in NSW in 2012 removed around 180 000 tonnes of aluminium from Australia's production capacity.

In 2012, 18.271 Mt of alumina was exported for a value of $5.152 billion. The average price was $282.0/tonne which was significantly lower than the 2011 price of $332.9/tonne.

As well as primary production, aluminium primary consumption and exports also declined in 2012 (Figure 5). In 2012, Australia consumed 233 216 tonnes of aluminium (down from 276 309 tonnes in 2011), and exported 1650 kilotonnes (down from 1681 kilotonnes in 2011) for a value of $3.460 billion (down from $4.099 billion in 2011). Like alumina, the average price of aluminium declined significantly in 2012 to $2097.5/tonne from the 2011 average price of $2439.0/tonne.

World bauxite resources are estimated at approximately 28 280 Mt with Australia holding the second highest amount after Guinea (Table 3). Brazil, Vietnam and Jamaica also hold significant resources (more than 2000 Mt) with Indonesia, India, Guyana, China and Greece making up the remainder of the top 10 countries.

Table 3: World economic resources for bauxite.

Source: United States Geological Survey and Geoscience Australia; Figures are rounded to nearest ten million tonnes; Percentages are rounded so might not add up to 100% exactly.