China may turn to Australia for bauxite after Guinea coup stokes fears of global supply disruptions, say analysts

The military takeover in the West African country could interrupt international supply of bauxite, a key ingredient in aluminium production

China imported more than 47 per cent of its bauxite from Guinea last year, but disruptions may force it to seek alternative sources in Australia

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Guinea is one of the world’s biggest bauxite producers, but a military takeover in the West African country has raised the risk of interruptions to global supply. Photo: EPA-EFE

Published: 5:50am, 8 Sep 2021Updated: 6:31am, 9 Sep 2021

China, both a producer and major consumer of aluminium, could turn to Australia for more supplies of the key raw material bauxite after a coup in Guinea threatened to disrupt global supply, analysts said.

Guinea and Australia are two of the world’s biggest bauxite producers, but the military takeover in the West African country has raised the risk of interruptions to production capacity and supply chains.

Prices of aluminium on London Metal Exchange surged to US$2,745 a tonne on Monday, hitting a 10 year high a day after Guinean special forces ousted the country‘s president, Alpha Conde, dissolved the constitution and closed land and air borders.

Soaring aluminium prices showed “the fragility of the global supply chain,” said Gu Fengda, an analyst at Guosen Futures.

Even before the Guinean coup, aluminium prices had increased 40 per cent since the beginning of the year due to the global economic recovery from the coronavirus pandemic, which was led by China’s manufacturing sector.

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