China’s Bauxite Dependence on Guinea: Navigating Risks for Aluminum Corp. of China Ltd.

Top Aluminum Producer in the World Faces Supply Challenges in Guinea

As the world’s largest importer of bauxite, China is heavily reliant on Guinea for its supply. This reliance leaves Aluminum Corp. of China Ltd. (Chalco) vulnerable to potential disruptions due to local policy changes and labor strikes in the country. Despite these risks, Chalco remains committed to maintaining a steady supply chain from its single mine in Guinea while also exploring opportunities for additional mines in the country’s north and collaborating on bauxite projects in other regions.

In recent years, Guinea has surpassed Australia and Indonesia as the largest exporter of bauxite, with a significant portion of its exports heading to China for aluminum production. With China’s own bauxite production declining and Indonesia restricting exports, Guinea’s dependence on China for bauxite imports is expected to increase further. There are rumors that Guinea may follow Indonesia’s lead and require foreign companies to establish refineries within the country, adding another layer of complexity to Chalco’s operations.

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 emphasized the importance of navigating these uncertainties while maintaining a stable supply chain for bauxite production, highlighting issues in the domestic market such as weak demand and uncertain expectations.

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