Aluminum Corp of China considers building Indonesian plant

China's top aluminium producer may build plant in Asian nation, after it curbed exports

PUBLISHED : Wednesday, 05 December, 2012, 12:00am
UPDATED : Wednesday, 05 December, 2012, 3:12am

Aluminum Corp of China, the country's biggest producer, is seeking to tap bauxite resources and build processing plants abroad after Indonesia, the largest supplier to China, curbed exports.

The company plans to build an alumina facility with a capacity of one million tonnes a year in Indonesia as the first phase, its president Luo Jianchuan said last Friday in Chongqing. "We're still doing a feasibility study," he said, confirming the earliest date for completion of the first phase is 2014.

Bosai Minerals Group is also considering an investment.

Indonesia banned exports of some mineral ores in May, except for mining business licence holders that plan to build local processing plants. Those shipments are subject to a 20 per cent tax, according to government regulations. Indonesia supplied 80 per cent of China's bauxite imports last year, data from the customs department showed.

Chalco said in August it signed an agreement with Indonusa Dwitama to form a joint venture and develop the Southeast Asian nation's biggest bauxite mine. The company has a similar plan in Laos, Luo said.

"The current holdings of bauxite resources abroad by Chinese companies are far from enough to meet demand," said Yang Yunbo, director of the light metals department at the China Nonferrous Metals Industry Association. "Bauxite will be a hurdle to sustainable development in the industry."

Chinese imports of bauxite from Indonesia tumbled 55 per cent in October from a year ago to 1.05 million tonnes, while total imports of the ore fell 30 per cent to 2.14 million tonnes, according to data from the General Administration of Customs. Bauxite is used to make alumina, which produces aluminium used in everything from window frames to beverage cans.

Bosai Minerals may also invest US$1 billion in an alumina project with an annual production capacity of two million tonnes, said its vice-president Liu Jianhong.