China Hongqiao’s aluminium smelter capacity at risk after environmental regulators impose penalty

China Hongqiao, which usurped state-backed Aluminium Corporation of China and Russian oligarch Oleg Deripaska-controlled Rusal in the space of two years to become the world’s largest aluminium smelter last year, has run afoul of Chinese environmental regulations on over half of its capacity.

Shandong province-based Hongqiao, 81 per cent-owned by tycoon Zhang Shiping, has been ordered by the environmental protection watchdog of Zhouping county of Binzhou city, where its facilities are located, to cease production at production lines with combined annual capacity of 3.61 million tonnes.

The reason given for the penalty was “failure to obtain environmental protection approvals before building and operating the facilities”.

The firm was also ordered to stop construction of a 1.32 million tonne-a-year smelting plant, the watchdog said, citing Hongqiao’s failure to seek new environmental impact assessment approval before making major changes to a downstream processing plant.

It was separately told to cease construction of a power plant with 4,800 mega-watts of generating capacity, shut down a 1,320 MW power-and-heat co-generation plant and an alumina refinery, due to failures to obtain environmental approvals.

Alumina is the raw material of aluminium, and is refined from the mineral bauxite.