Foresight, strategic planning and a little luck have paid off for Australian Bauxite, whose three original directors saw the writing on the wall in 2009 when Indonesia decided to reduce its raw bauxite exports to China.

The company set about finding quality bauxite resources in favourable locations and less than six years later, it has three key projects and just started mining its first at Bald Hill in Tasmania.

This mine will give customers a taste of high-quality bauxite and lead on to the development of the company's flagship bauxite project at Binjour in Queensland.

The company thinks Binjour is the best undeveloped opportunity for significant silica-free, gibbsite trihydrate bauxite production in the Pacific Basin.

This type of bauxite can be processed into alumina at low temperature and is in short supply, which the company believes will make it globally significant in the seaborne bauxite market.

"We predicted late 2014 was a good time to start a new business because there would be a great demand for new supplies of bauxite," chief executive Ian Levy explains.

True to their word, the company has secured a 119 million tonne bauxite resource across 37 tenements in Tasmania, Queensland and New South Wales and started operations at Bald Hill in December 2014.

In a stroke of luck for the company, mining got underway well under budget thanks to the downturn in iron ore and the falling Australian dollar.

"We'd assumed we'd have to buy everything brand new and our estimated capital cost was $A11.5 million, but it's come in just under $3.5 million," Levy said.

Equipment the company planned to build or buy was lying idle due to the iron ore downturn, and they have hired items such as a ship loader and half-height rail containers at a reasonable price.

"Also the bauxite market is remaining very, very firm at a time when the Australian dollar is collapsing thanks to the iron ore downturn," Levy said.

"So as the Australian dollar turns, the price of bauxite has skyrocketed, so we're hitting the market at the right time.

"We don't control the exchange rate or the iron ore price - they're good benefits for us that we couldn't plan - but we had identified this time in history as the most important time to get into production."

Bald Hill is fully funded through a strategic alliance with Noble Resources International, which provided project finance in return for global marketing rights and supportive marketing off-take agreements for the Tasmanian operations.

Levy expects to produce up to 2Mt per annum of bauxite out of Tasmania, firstly from the Campbell Town production centre, which includes Bald Hill and future projects Fingal Rail and Nile Road.

The second production centre is expected to be DL-130, also in northern Tasmania, which has bauxite up to 14m thick.

The total Tasmanian resource was upped 61% in March to 9.2Mt.

In a further stroke of luck, the bauxite does not seem to require crushing thanks to the breakdown that occurs naturally during stockpiling.

"We've found a cluster of 15 deposits that all appear economically viable, all within 110km of the Bell Bay port and all on major transport routes," Levy said.

"However, Tasmania was never going to be our largest project, it was just going to be our first.

"Our best is going to be Binjour.

"It's 100km from port of Bundaberg in central Queensland, and it turns out to be the largest series of deposits, and in the medium term will become our flagship deposit."

He said Binjour was never going to be the first cab off the rank because of its capital cost between $100-150 million.

"A small company shouldn't put itself in the position where it has to go into debt or give away too much of the project to get into production," Levy said.

"So that's the reason we've methodically worked our way through those alternatives."

He said the NSW project at Goulbourn was on hold until the planned port expansion at Kembla was complete and could handle the bulk material.

"We've got three really big projects across three states, three very keen customers that we hope to have a long-term relationship with, we have zero debt and we have $3.7 million in the bank," Levy said.

"All of this is because of our terrific 3000-member shareholder base who have been remarkably faithful and have supported us from day one.

"They believed in the story and knew that to build a brand new business from scratch, it doesn't happen overnight.

"The good thing is, we did start the project at the end of 2014, which is what we said we were aiming to do, and that was due to unbelievable public support in Tasmania.

"I've never experienced that kind of support in my entire 38-year mining career."

Levy said unknown to the company, state-significant landowners had taken the time to read the extensive environmental report then wrote letters of support; farmers have started asking the company to assess and mine the bauxite on their land and the 100% local workforce was proving hard-working and reliable.

"We've made a pledge that it's time to reciprocate support and deliver," Levy said.

"We only operate where we're welcome, we aim to leave the land better than we found it and our mining operation is very simple as the bauxite is virtually at the surface.

"We only employ Tasmanian employees, we are more than halfway through recruitment and it will grow up to 45 persons, with a multiplier of about 3.5.

"We'll generate about 180 jobs. In mainland states, that's not a big deal, but it is in that part of Tasmania."

Levy said the company aimed to maintain a debt-free position with the ability to shut the mines off if the price wasn't right.

"If there isn't a profit, we shouldn't be mining," he said.

"So I'm hoping to be a swing producer and achieve an economic clearing price for our product.

"Those customers who get to like our bauxite from Tasmania will be addicted to the very high grade material that we plan to produce from Binjour.

"We want to start shipping as quickly as possible."

Levy said trials were due to run at the time of going to press and the company hoped to get its first 30,000-tonne ship away in May, then another to a second customer in June.

"Then we'll start working to double the delivery rate, so we can eventually ship using 66,000t ships which will be the largest ships to ever come to Tasmania," Levy said.

"We are quite hopeful that we'll be able to get a shipment away mid-year and get the cash flow going … and then you'll hear us shouting our story from the rooftops.

"If you combine our planned production, we believe in seven or eight years, we'll be exporting 5-10Mt of bauxite from Binjour, Tasmania and Goulbourn, and that would make us a significant world trader in the seaborne bauxite market.

"It's all from tiny beginnings, and it's all because of 3000 really good supportive shareholders."

*A version of this report, first published in the May-June 2015 edition of RESOURCESTOCKS magazine, was commissioned by Australian Bauxite.