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China’s Reliance on Guinea for Bauxite Imports: Navigating Uncertainty in the Aluminum Market

Top Aluminum Producer in the World Faces Supply Challenges in Guinea

China’s Reliance on Guinea for Bauxite Imports: Navigating Uncertainty in the Aluminum Market

In recent years, Guinea has emerged as China’s largest bauxite supplier, surpassing both Australia and Indonesia. As such, the country provides 70% of China’s bauxite imports. However, this heavy reliance on Guinea leaves Aluminum Corp. of China Ltd (Chalco) vulnerable to disruptions that may arise due to local policy changes and strikes. To mitigate these risks, Chalco is aiming to maintain a steady supply chain from its single mine in Guinea while also exploring opportunities to develop additional mines in the country’s north and collaborate on bauxite projects in other regions.

Despite a 60% increase in net income last year, Chalco has 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.

In response to growing concerns about its dependence on Guinea for bauxite imports, China has been exploring alternative sources of the mineral. However, given the significant portion of China’s exports heading to Guinea for aluminum production and Indonesia’s decision to restrict exports, it is likely that Guinea will continue to be a crucial source of bauxite for China in the near future.

Speculation has also arisen that Guinea may mirror Indonesia’s policy of requiring foreign companies to establish refineries within the country. While this would undoubtedly have an impact on Chalco’s operations in the region, it remains unclear whether such a policy would be implemented.

Overall, while Chalco has faced challenges in maintaining its supply chain in recent years, it remains committed to finding ways to navigate these uncertainties while maintaining its position as one of the world’s largest producers of aluminum.

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