Aluminium Supply Chain Project (Vietnam)

Overview

Atlantic has signed a Memorandum of Understanding (MOU) with Vietnamese state-owned corporation, the Vietnam Natural Resources and Environment Corporation (T-MV), for the development of major rail, mine, processing and port project in the Central Highlands of Vietnam.

This is a milestone event for both Atlantic and the development of the aluminium industry in Vietnam.

This project will be a very significant contributor to the economy of the Central Highlands region as well as the entire Vietnam economy and will directly benefit the people of Vietnam by providing jobs, skills training and business opportunities.

Atlantic is excited to be working with T-MV on such a major nation building project and the Board of Atlantic believes that the opportunity has the potential to add significant value for stakeholders in Vietnam as well as Atlantic shareholders.

Atlantic believes this is a strong business opportunity given Vietnam’s competitive advantages in the aluminium supply chain, including the high quality gibbsite ore typically found in the Central Highlands region and the proximity of the project to major world demand centres where there is an over capacity of refining and smelting capacity but an undersupply of high quality bauxite.

The parties are currently working towards a definitive joint venture agreement.

T-MV

T-MV (Vietnam Natural Resources and Environment Corporation) is a recently created state-owned corporation that operates directly under the Vietnam Ministry of Natural Resources and Environment.

Location

Vietnam Location Map

Development Plan

Atlantic believes that its Vietnam aluminium supply chain project represents an outstanding opportunity with MOU partner T-MV for the development of an integrated project encompassing all aspects of the aluminium supply chain targeting the growth markets of East Asia.

T-MV and Atlantic intend to complete a feasibility study encompassing rail transportation, mining, and port development in Vietnam with a view to adding downstream alumina and aluminium processing in due course. The rail transportation component relates to the development of a new rail line from Lam Dong and Dak Nong provinces to port facilities on the coast of Vietnam (see below for map of proposed route). This strategic new infrastructure will be developed on open access principles.

The bauxite deposits in the Lam Dong and Dak Nong Provinces are relatively close to power, the coast, and a large population and industrial centre at Ho Chi Minh City. A railway to the coast would have to be built. Alternate routes for a railway line to a possible export facility at the port of Ke Ga are being considered by Atlantic and T-MV.

T-MV and Atlantic intend to proceed with the project on signing of the definitive joint venture agreements and the receipt of necessary approvals from the Vietnam Government. The joint venture interests of T-MV and Atlantic will reflect the contributions of the parties. If definitive joint venture agreements are executed Atlantic intends to undertake the exploration of the relevant sites and provide the funding for the project, however, at this stage there has been no binding agreement to fund any of the potential project expenditure.

This integrated, nation building project is of major strategic importance and will provide significant economic and social benefits for Vietnam and local communities.

Proposed Highlands rail infrastructure
Figure 2 - Proposed Highlands rail infrastructure

Resource Evaluation

T-MV and Atlantic intend to undertake comprehensive resource evaluation as part of the feasibility study.

Vietnamese evaluation of the deposits to date includes mapping, pitting, trenching, assaying and washing/concentration tests. The data has been used to generate resource and reserve estimates under the Russian classification system, but the work is not of a sufficient quality to enable resource estimates according to Australian mandated standards i.e. the JORC Code. There is however sufficient confidence in the Vietnamese work to state that any properly conducted evaluation is highly likely to confirm the estimated tonnages and grades, and mineralogical and concentration characteristics of the deposits.

The Vietnamese ore reserve classification system follows the Russian system, i.e. A, B, C etc. In broad terms, these may be compared to Measured, Indicated and Inferred Mineral Resources under the JORC Code in terms of level of confidence in the estimates. The estimated tonnages and grades for the Central Highlands bauxite deposits were predominantly classed as C2, based on sampling on an 800m x 800m grid in larger zones and on a two sample/km² density within the smaller, irregularly shaped zones. In some places sampling was on 400m x 400m and 200m x 200m grids, leading to higher confidence C1 and B classifications. In some zones where the area of the deposit was defined by geological and geomorphological mapping and the thickness determined by averaging the thickness of the adjacent deposits the estimate was designated P1 which is a lower confidence category.

The initial criteria for defining crude ore were:

Table 2. Vietnamese Criteria for Definition of Bauxite Deposits

 

Criterion

Cut-off

Minimum Al2O3 content:

30%

Minimum Si-modulus:

2

Minimum thickness of bauxite:

1m

Maximum thickness of included barren interval:

1m

 

Location of bauxite deposits in Vietnams South Central Highlands
Location of bauxite deposits in Vietnam’s South Central Highlands (Source: CSA Global)