China’s Reliance on Guinea for Bauxite Leaves Aluminum Corp. Vulnerable to Disruptions.

Top Aluminum Producer in the World Faces Supply Challenges in Guinea

Bauxite, the raw material for aluminum production, is a vital resource for China’s economy. However, the reliance on a single source of bauxite in Guinea has left Aluminum Corp. of China Ltd (Chalco) vulnerable to disruptions that may arise due to local policy changes and strikes. Chalco aims to maintain its steady supply chain from its mine in Guinea while also exploring opportunities to develop additional mines in the country’s north and collaborate on bauxite projects in other regions.

Guinea has become the largest exporter of bauxite in recent years, surpassing Australia and Indonesia. A significant portion of its exports goes to China for aluminum production. As China’s own bauxite production declines and Indonesia restricts exports, China’s dependence on Guinea for bauxite imports is expected to increase.

There are concerns that Guinea may mirror Indonesia’s policy of requiring foreign companies to establish refineries within the country. This could further complicate Chalco’s operations and increase costs.

Despite reporting a 60% increase in net income last year, Chalco warned of challenges ahead due to slow global economic growth and rising geopolitical risks. The company highlighted issues in the domestic market such as weak demand and uncertain expectations, emphasizing the need to navigate these uncertainties while maintaining a stable supply chain for bauxite production.

Leave a Reply