SHANGHAI: The world’s top private aluminium producer China Hongqiao Group plans to move 1.93 million tonnes of aluminium capacity to the Honghe prefecture in southwest Yunnan province, a local government notice showed.

According to a statement issued by the Yunnan industry department, the aluminium giant aims to relocate capacity from six projects in its Shandong units to Yunnan Honghe New Material Co via a capacity swap plan. Hongqiao had pledged to move around 2 million tonnes of its annual capacity from eastern Shandong province to Yunnan’s Wenshan prefecture for easier access to hydropower, a cleaner source than coal. Reuters reported in May that the company was considering relocating more capacity to Honghe prefecture.

That suggested more than 60% of the company’s 6.46 million tonnes of licensed annual primary aluminium capacity will be located in Yunnan.

Yunnan is home to around 10% of China’s aluminium capacity. It depends on hydropower for 75% of its electricity, though output from hydro plants had been falling for two straight months in October and November both on a monthly and annual basis.