Australian bauxite producer Metro Mining (ASX:MMI,OTC Pink:MMILF) is positioning for significant growth as global demand for aluminum continues to surge. CEO Simon Wensley noted that the company has aggressively scaled production, growing from 2 million tonnes annually in 2021 to a consistent rate of roughly 7 million tonnes this year.
He said this expansion is key because the company’s “fixed costs are probably upwards of 80 percent of (its) total costs,” and spreading those costs over higher volumes is lowering per-tonne production costs.
“That expansion has allowed us to offset those fixed costs against a larger production base. And so what you see then is our cost of production going down,” Wensley said.
“If we can implement all of these expansions and all of the improvement programs that we have underway, next year … we’re targeting to be the lowest-cost supplier into the Asia-Pacific market, and we’re on track to be able to do that.”
Bauxite is essential for producing aluminum, a metal seeing rapid demand increases from transportation, renewable energy and grid infrastructure. With aluminum usage expected to grow more than 120 percent under the World Bank’s scenario, Metro sees long-term strength in the market.
Watch the full interview with Wensley above.
