Thoughts on investing in Weipa QLD?

Major miners are looking to step up bauxite exports to China, whose appetite has risen sharply as it has boosted production of alumina. It takes four tonnes of bauxite to make two tonnes of alumina and one tonne of aluminum.
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weipa will export bauxite direct to china. As well as this is a higher grade bauxite that requires less caustic to refine into alumina so more cost affective for Aussie refineries therefor higher demand.... You would think that with a struggling aluminum industry and rio cutting back on it's spending they wouldn't go ahead unless it was a good investment for the company?
china's bauxite demand the whole story
 
Hi
I'm currently looking into a a trip to Weipa to have a good look around, and would like to guage investor interest. PM me if you're interested or would like me to take up any questions.
Cheers
Jen
0419 772 237
 
JenJen said:
Hi
I'm currently looking into a a trip to Weipa to have a good look around, andwould like to guage investor interest. PM me if you're interested or would like me to take up any questions.
Cheers
Jen
0419 772 237
Click to expand...
So Jenjen how did you go up in Weipa? I would like to know your thoughts. Did you hear about the
new mine approval ?
 
Arnoldus said:
Personal opinion (and i'm wrong almost as often as i'm right), but you'd take on less risk and get a proportionate level of returns investing in companies with exposure to Bauxite, like Rio Rinto Alcan?

If Bauxite or Weipa goes sour, you could potentially be left with an illiquid asset carrying a significant amount of debt
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Bauxite going sour? Are they going to find something else to make aluminum out of or maybe stop making aluminum cans?
Weipa is the capital of Cape York, many communities rely on Weipa's infrastructure.
 
Jenko said:
Bauxite going sour? Are they going to find something else to make aluminum out of or maybe stop making aluminum cans?
Weipa is the capital of Cape York, many communities rely on Weipa's infrastructure.
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It's a sub 10k population town (if not sub-5k), one of the most isolated towns in Qld, sub-par infrastructure and 1 major industry supporting it. It's an all-or-nothing bet, the rewards are there, but the risks are extreme.

If you're looking long-term (i.e 10+ years), you need to be considering whether other bauxite supplies might come online in other parts of the world, whether there'll be structural changes resulting from how bauxite is mined or it's demand from users of the product etc. etc.

I remember folks saying China will always need coal and iron ore and that places like Moranbah and Emerald were a solid bet... yet here we are seeing mining towns getting slaughtered. Bauxite might turn out different, or maybe I don't quite understand the market, but I'd put Weipa on a similar risk rating to what Moranbah and Emerald were pre-2012
 
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Let's say they open a massive bauxite deposit in a another country. One that's cheaper to mine. Maybe a big project planned for Guinea? Ore and bauxite? No health and safety or carbon tax to impede profits.

Then weipa is in trouble. Rio has no problem placing a site in care and maintenance if they can get it cheaper elsewhere. There goes 90 percent of the workers and all the contracting company's.

Will have to wait and see what the Simandou project does.
 
Jenko

Unfortunately bauxite isn't that rare and there are plenty of deposits in indo, China, Mongolia etc

Your investment in weipa has done you well but in reality how much further can it go?
Maybe you can ride out another mine opening and do well but you have to realise that mining is a world wide economy

Looking at moranbah and Dysart is a good example of when things go wrong. People have lost hundreds of thousands there, seen there investment more than halve in size.

Not saying it will happen in weipa but I think you need to research the global markets to get a good understanding of the risk
 
Weipa makes ryders top ten Terry's top ten long shots. I don't think its a long shot myself. The price of Bauxite is going up, Rio's new SOE mine is going ahead. And the government is backing another Bauxite mine down at Aurukun which will bring employment and loyalties to the indigenous community. If this goes ahead it should also create positive affect for Weipa properties being less then a couple of hours drive or a twenty minute flight away.
 
Jenko said:
Weipa makes ryders top ten Terry's top ten long shots. I don't think its a long shot myself. The price of Bauxite is going up, Rio's new SOE mine is going ahead. And the government is backing another Bauxite mine down at Aurukun which will bring employment and loyalties to the indigenous community. If this goes ahead it should also create positive affect for Weipa properties being less then a couple of hours drive or a twenty minute flight away.
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It's not a long shot, but unless you're going all in with cash, it's definitely an all or nothing bet. Hopefully the project gets up, there will be a lot of flow-on work with road construction and other infrastructure.
 
Jenko said:
So your saying if you buy in to this market you have a chance of loosing everything? Sorry can you please explain?
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If you gear into the Weipa market and the Bauxite mine goes to custard, you're going to lose all your equity in the IP and possibly go -ve.
 
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