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Global Processing e-News / Asia

Chalco to invest in Indonesian alumina plant

December 10, 2012
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CHONGQING, China — Aluminum Corporation of China Limited, China''s largest producer of aluminum, is planning to open new processing plants in Indonesia after the country reduced exports, according to the South China Morning Post.

Indonesia is the biggest supplier to China, accounting for about 80% of the country''s bauxite imports, and a ban on exports could have an adverse effect on production. That is why Aluminum Corporation of China Limited, also known as Chalco, intends to launch its own plants there and tap Indonesian bauxite resources. Chalco is planning to invest in a new alumina plant that would produce 1 million tons per year, said president Luo Jianchuan in an interview in Chongqing. He explained that the project is currently in its first stage, where feasibility research is being conducted. This stage is set to finish in 2014-2015, he said.

Exports of some mineral ores from Indonesia were banned in May this year, but businesses that wanted to invest in local processing plants were exempt from the ban. However, their shipments were to be charged with a 20 percent tax, the government stated.

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In August, Chalco announced that an agreement for a joint venture had been signed with PT Indonusa Dwitama. The project is expected to develop the largest bauxite mine in Indonesia. Chalco also plans a similar move in Laos but Luo did not provide any details regarding this project.

Yang Yunbo, director of the light metals department at the China Nonferrous Metals Industry Association, commented that bauxite resources abroad that are currently run by Chinese companies are far from sufficient to meet domestic demand and a deficiency might prove a barrier to sustainable development of the industry. Bauxite is used in the production of alumina, which is in turn processed into aluminum for a wide range of purposes, from window frames to food and beverage cans.

October figures released by the General Administration of Customs show that bauxite imports into China plummeted by 55 percent to just over 1 million tons, whereas total imports of ore dropped by one-third to 2.14 million tons.

Chalco is not the only company that intends to invest in an alumina plant in Indonesia. Industrial minerals mining company Bosai Minerals Group is planning to inject $1 billion in a number of projects, including an alumina plant with a capacity of 2 million tons per year, as well as power plants and port facilities, company vice president Liu Jianhong announced.

China is the largest aluminum producer and user globally, with a total output of 16.5 million tons between January and October this year, up 11 percent year-on-year. Production for August set a new record, reaching 1.75 million tons, the National Bureau of Statistics revealed.

Figures also show that demand over the first three quarters of the year increased by 5.8 percent to 14.4 million tons. However, this is the lowest level of growth since 2000 and was 5 percentage points lower than the same period a year ago.

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