China's northern province of Shanxi on Tuesday offered some of the country's biggest aluminium companies preferential access to bauxite resources if they transfer smelting capacity to the region. State-owned Aluminum Corp of China, known as Chinalco, as well as privately-owned Xinfa Group and East Hope, are being encouraged to set up alumina projects, acquire bauxite resources or move smelting capacity to Shanxi, according to the province's 2018 action plan for the nonferrous metals industry.
The move follows a call from a top industry executive to move Chinese aluminium production to more remote areas for environmental reasons. Bauxite is a rock processed to produce alumina, which is then used to make aluminium. Shanxi is China's second-biggest alumina-producing province, but it churned out only 480,000 tonnes of aluminium products last year, versus 12.12 million tonnes in Henan, the biggest producing province.
Its bauxite resources "will be prioritised for those companies that are transferring electrolytic aluminium capacity to our province," the Shanxi Provincial Commission of Economy of Information Technology said in the document. China has been clamping down on illegal and outdated aluminium capacity to improve efficiency and reduce environmental harm. Companies are in some cases entitled to replace their shuttered plants with new facilities, provided they stick within replacement capacity quotas.
Chinalco has already been drawn to Shanxi. The action plan said the province would push for an ahead-of-schedule launch of a 432,000-tonnes-per-year aluminium smelter owned by Chinalco's listed arm Chalco and joint venture partner Huarun Group.
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