Bloomberg today carried a story that Glencore is working to secure the rights to the Aurukun bauxite deposit in remote north west Queensland in Australia.

It is still early days yet for Glencore, as it is still seeking to secure a mineral development licence that would allow it to explore more fully the requirements for extracting, processing and shipping the ore.

Let’s hope the word “Aurukun” means “third time lucky” in the local Aboriginal dialect. The site has had a bumpy history. For thirty years, the French aluminium producer Pechiney (now part of Rio Tinto Alcan) held the licence to develop the site, but never did so. About 10 years ago, Chinalco successfully lobbied the Queensland government to take the licence off Pechiney, then finally succeeded in securing the licence for itself in about 2007. Despite a lot of promises and some initial funding, Chinalco was not able to get anything happening, and finally gave up on the site in about 2010.

I am not sure of the quality of the bauxite, but even if it is best quality, the location leaves a lot to be desired. The Cape York peninsula is extremely remote, and the reserves are on the “wrong” side - the western side of the cape where there are no shipping points and no deep water for vessels. That means railing the ore to the east side of the cape, but shipping on the east side is fraught with environmental danger. The Great Barrier Reef, a world-heritage listed site, sits off the coast of the sea ports there. Any increase in shipping activity or the size of vessels will be decried by environmentalists, who say that the Reef is already under attack on a number of fronts.

The one thing that Aurukun has going for it is that it has a natural market 2 weeks sailing time away - China. With world prices of bauxite set to find new higher floors thanks to bans in Indonesia and long shipping times from West Africa or the Caribbean, this gives Glencore or any other stakeholder more “wriggle room” to fund the huge costs challenges involved in developing the site.