New power tariffs devised for new aluminium projects in Inner Mongolia

All upcoming aluminium projects in Inner Mongolia will now have to adopt a new price-base power tariff system. According to a recent Shanghai Metals Market report, the government has decided to implement a new pricing mechanism, which is based on aluminium prices in the Shanghai sport market.

Under the price-based tariff system, power plant sells power to power grid company at 0.15 yuan/kwh when aluminium prices in Shanghai spot market are 11,500 yuan/tonne. Power grid company charges aluminium smelter 0.1 yuan/kwh fees. That means, aluminium smelters need to pay 0.25 yuan/kwh power tariffs.

Since prices of power sold by the power plant, fees charged by power-grid company and tariffs paid by aluminium smelter owners are all linked in the new system, when aluminium prices in the Shanghai spot market will rise, value of these components will be hiked by a certain percentage accordingly.

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