BAUXITE & ALUMINA CONF: South32 migrates to index-linked contracts for ties to alumina 'market price'

South32 has transitioned all of its long-term alumina contracts, bar one legacy agreement, to market-based, index-linked pricing, delegates heard at Metal Bulletin's 23rd Bauxite & Alumina conference last week.

The transition ensures that the diversified miner's pricing is tied to market fundamentals, Peter Finnimore, South32's head of marketing, said. "We don't enter into contracts other than index or spot-based contracts. We don't do London Metal Exchange percentage-linked contracts," Finnimore said. Metal Bulletin's fob Australia alumina index, which was launched in 2010 in response to calls for a reference price tied to the fundamentals of the alumina market, and since emerged as a benchmark for the industry. As a percentage of the three-month aluminium price on the LME, alumina has traded between 13% and above 20% in the past 18 months, according to Metal Bulletin's index. The wide range, which is illustrative...

Published

Charlotte Radford

March 20, 2017

09:50 GMT

London