Chalco says no plan to expand Guangxi alumina JV

Aluminum Corp of China Ltd (Chalco) has no plan to expand alumina capacity at a joint venture in Guangxi because of high building costs and low alumina prices, investor relations manager Zhang Qing said on Monday.

The comments came despite the Guangxi government requesting the partners of Huayin Aluminum, which is 33-percent owned by Chalco, to double alumina capacity at the joint venture to 3.2 million tonnes. Alumina is used for aluminium production.

"For now, we do not plan to build. The building will depend on the market situation," Zhang told Reuters from Beijing.

Increased alumina production, coupled with production cuts at aluminium smelters due to power shortages, forced Chalco to cut spot alumina prices twice within two months.

"The second phase of the refinery is to build another 1.6 million tonnes. But it is up to Chalco, which now says it would not build it in next 2-3 years," said an investment official in Debao county in Baise city, home of Huayin's alumina refinery.

Beijing has tried to cool investment in the energy-intensive aluminium industry in the past 5 years. But some local governments in underdeveloped areas are still making attractive offers for such projects to boost local economies.

The Baise city government was in talks with Shandong-based Xinfa Group to build a 600,000-tonne-a-year aluminium smelter in the city, an official for the city's investment bureau said.

Xinfa already operated a 320,000-tonne-a-year aluminium smelter in Jingxi country in Baise and was running trial production at a 1.2 million tonne-per-year alumina refinery, the official said.

Annual capacity of the alumina refinery is planned to be expanded to 1.6 million tonnes.

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