With tenements in under-explored eastern Australia, Australian Bauxite is set to become the nation's first new producer in 30 years.

China dominates the refining of bauxite into alumina but its reserves are depleting faster than expected.

According to Chinese customs records, since 2004, bauxite imports into China have risen from less than 1 million tonnes per annum to more than 50Mtpa today.

Until now 65% of imports into China have come from Indonesia but as Indonesia is shutting down bauxite exports, China must turn to Australia, and this is where Australian Bauxite comes into play.

Perhaps even more exciting is the fact that the company holds 38 tenements covering more than 8500sq.km in eastern Australia, an area once forgotten for bauxite.

"We are very excited about our eastern Australian deposits - we hold the core of the entire province," Australian Bauxite managing director Ian Levy said.

"We have several projects which show considerable promise."

The bulk of Australia's bauxite industry is on the west coast and at Weipa on Cape York but the rest of the east coast has flown under the radar - that is, until now. "Eastern Australia had been explored in the past [1915 to 1950] but with the discovery of Weipa on Cape York in 1956, all other areas of eastern Australia were regarded as of lesser importance," Levy said.

"Weipa had the promise of 3 billion tonnes of bauxite so all else was forgotten."

But Weipa can't produce low-temperature bauxite - Weipa will supply China's high temperature refineries as a better quality substitute for Chinese bauxite.

"Australian Bauxite discovered that the long-ignored eastern Australian bauxite was bigger than first expected and was almost totally low-temperature gibbsite-rich bauxite, thus an ideal substitute for the Indonesian bauxite supply into China and into India, which has similar shortages of bauxite," Levy said.

Western Australian bauxite is typically lower-grade and needed for WA's massive alumina refineries south of Perth.

"So, Australian Bauxite is best positioned to be the first new supplier of seaborne bauxite from the Pacific Basin," Levy said.

Bauxite prices and demand are growing strongly while other commodities, including aluminium, are flat.

"Even if aluminium prices stay flat, bauxite's outlook is exceptionally positive - the best in the mining industry," Levy said.

Bauxite is used to make aluminium and alumina. Aluminium is being utilised in increasingly wider applications, even replacing other materials - vehicle wheels, bodies and motors are now being made in aluminium rather than steel.

Upgraded smelting technology has also changed the industry structure for aluminium, with the industry becoming less vertically integrated.

Bauxite is in abundant supply across the world, but importantly for Australian Bauxite, the quality varies.

"There is a fantastic opportunity for Australia, with its proximity to China, to become the major source of bauxite for China," Levy said.

Australian Bauxite's most advanced project is at Goulburn, southwest of Sydney, based on eight tenements including Taralga which already has a 25Mt resource with more coming after recent discoveries of the thickest bauxite found in Australia, hidden beneath just one metre of soil.

The company has entered into a joint venture with Japanese trader Marubeni to complete a $1.5 million prefeasibility study.

Goulburn's close proximity to infrastructure, including heavy rail lines leading directly to Port Kembla, makes it the ideal first project for the company.

The project will supply 1.5-3Mtpa, with a plan to start in 2014 when Indonesian supply is expected to slow markedly.

It will allow the market to become familiar with eastern Australian bauxite.

The second advanced project, and Australian Bauxite's biggest, is at Binjour, 100km inland from Bundaberg in Queensland.

"Not only big, Binjour's bauxite is of the highest grade that we have discovered so far," Levy said.

"Finally, the state government views this project as being state-significant so we are hopeful of their valued assistance in bringing the project to fruition, especially with expansion of the Bundaberg export port."

The project has already shown excellent drilling results and Australian Bauxite expects to soon update the resource estimation.

"The bauxite located so far is gibbsite-rich, low-temperature and of superior quality, being extraordinarily low in silica and high in available alumina," Levy said.

It requires less processing cost and is termed "brown sugar" as it is suitable for sweetening circuits in refineries.

Other promising projects are located in central Tasmania and New South Wales.

"The best is yet to come," Levy said.

"Our long term goal is to become the preferred independent Australian supplier of premium-quality, low-temperature bauxite to China and possibly India."

The company hopes to dominate a niche market within the bauxite industry, not competing with the likes of Rio Tinto, much like speciality coal suppliers within the coking coal market.

Australian Bauxite is on target to be the first new bauxite producer in the country in 30 years. And the company is going about its business in the best way possible.

"We have acceptance from our 250 landholders and we always strive to maintain strong landowner relations and only operate where we are welcomed," Levy said.

"We support best practices for agricultural land and aim to leave the land at least as good as we found it, if not better."

*A version of this report, first published in the June/July 2012 edition of RESOURCESTOCKS magazine, was commissioned by Australian Bauxite