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Bauxite Resources Shares On The Move

Bauxite Resources (ASX:BAU) shares are now trading at $0.14, bringing gains for the past 6 weeks to 40%, following a resource upgrade at its Fortuna deposit in the Darling Range, Western Australia.

The value of bauxite has increased substantially in recent times, spurred by the Indonesian export ban that has also driven the price of nickel higher.

It is estimated that about 42 million tonnes of bauxite was exported last year from Indonesia to China, however no Indonesian bauxite imports have been reported since April this year.

It is expected that China's bauxite import inventory will continue to shrink during the June quarter of 2014, and imports of non-Indonesian bauxite will increase.

Once these stockpiles are exhausted, it is expected that China will require several new significant sources of imported bauxite to satisfy demand out of China.

This anticipated rise in demand has led to an increase in bauxite prices over the past few weeks.

Interest in BAU has followed suit; BAU is also a safe haven of sorts, capitalised at around $31 million, with almost $38 million in cash - which would be after the $0.04 per share capital return to shareholders - which is pending shareholder approval.

The company recently completed a resource upgrade at its Fortuna deposit in the Darling Range, Western Australia.

The upgrade could ultimately see BAU produce a DSO product after upgrading took the resource to 40.2 million tonnes at 31.2% low temperature available AI2O3 and 1.8% reactive silica.

This compares with its previous estimate of 39.5Mt at 28.8% available alumina.

Fortuna is located on two private landholdings located 60 kilometres northeast of Perth and 15 kilometres of existing rail infrastructure.

This railway is linked to the Kwinana port 120 kilometres away, as well as the Bunbury Port within 250 kilometres.

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