Chinese region eyes alumina, aluminium expansions

Chinese region eyes alumina, aluminium expansions

China’s Bose region in southern Guangxi, where two of the world’s largest alumina producers have investments, aims to boost alumina production capacity more than five-fold by 2010, a local government official said on Friday.

The region’s ambition to raise annual capacity to 5 million tonnes from the current 850,000 tonnes may add pressure to world alumina prices, which have fallen more than 50 percent since July this year, partly due to a rapid rise in production in China.

The government of the Bose region also wants to more than treble aluminium capacity to 1 million tonnes a year by 2010, despite a series of measures by Beijing to cool investment in the resource-intensive industry.

“Bose is a region where many ethnic locals reside. Beijing will probably have preferential policies for us,” a local government official involved in the region’s industrial development told Reuters.

Bauxite-rich Bose is the location of Pingguo plant, which is believed to be the most efficient alumina refinery in China. It is owned by Aluminum Corp. of China Ltd. , the world’s second-largest producer of alumina, which is produced from bauxite. Alumina is used to produce aluminium.

State-controlled Aluminum Corp., also known as Chalco, is building a 1.6 million tonne-per-year alumina refinery in Bose in the Chinese southwestern province. Construction is expected to be completed by July 2007, the official said.

The new refinery would be operated by Huayin Aluminum Co. Ltd., which is 33 percent-owned by Chalco, with the rest held by state-owned Minmetals Nonferrous Metals Co. Ltd. and Guangxi Investment.

The Bose government is keen on adding another 1.6 million tonnes of alumina capacity at the same location near the Huayin refinery and also intends to build an aluminium smelter, with an annual capacity of 300,000 to 400,000 tonnes, the official said.

He said the planned extra alumina capacity and aluminium smelter could be developed by other Chinese and overseas investors if Huayin was not interested to do so.

“We want the alumina produced from there to be used locally,” the official said.

Chalco, of which top global alumina producer Alcoa Inc. owns 8 percent, sells alumina produced from Pingguo plant to smelters across the nation. Chalco and Alcoa plan to set up a joint venture to run the Pingguo Plant.

The Bose official said Chalco was expanding alumina capacity at Pingguo plant to 1.65 million tonnes a year, from the current 850,000 tonnes.

Expanded capacity at Pingguo would boost alumina capacity in Bose to nearly 5 million tonnes if the planned additional 1.6 million-tonne of capacity was built.

Chalco was separately seeking approvals from Beijing to add a 250,000-tonne facility at Pingguo plant to expand aluminium capacity to 485,000 tonnes a year, he said.

Two smaller aluminium smelters in Bose have a combined capacity of 170,000 tonnes a year.

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