Malaysia bauxite ban to be extended

Bloomberg has just run a story that the Malaysia ban on mining of bauxite is to be extended another 2 months.

According to the story, the Malaysian Minister for Natural Resources and Environment Wan Junaidi Jaafar has told reporters that the ban will be extended until September 14.

According to Bloomberg, there is still 5.4 million tons of bauxite stored around the port, and this seems to have been the reason for the extension to the ban on mining. The original purpose of the ban on mining was to allow the port to catch up on exports, which in turn would allow port management to clean up the area. There had been reports of fouled waterways and poor dust control. Indeed, in the two visits I have made the the port, it is not the best run operation in the world. During the monsoon period, the place was a quagmire.

Despite the ramp up in aluminium production in China in recent weeks, there is still no shortage of bauxite or alumina, and an extension of another 2 months will hurt only the Malaysian miners who are reliant on exports for their income. China still has bauxite in storage, and has a good flow from other sources, including its own domestic bauxite, not to mention imports of alumina.