Bauxite and alumina: Emirates Global Aluminium signs deal to supply bauxite to Xinfa

Aluminium rods

Emirates Global Aluminium (EGA) has signed an agreement with Xinfa, the major Chinese aluminium producer, to begin supplying it with millions of tonnes a year of metallurgical bauxite from January 2020. EGA is the UAE’s largest industrial company outside the oil and gas sector. The bauxite will be sourced from EGA’s operations in West Africa, from the Guinea Alumina mine

Roskill view

Guinea has become an area of interest as a source of bauxite in recent years with extensive reserves reported. Guinea Alumina is EGA’s first bauxite mining project and it is claimed to be one of the largest greenfield projects in Guinea in the last 40 years. EGA has invested some US$1.4Bn in the project’s first phase and a second phase is also planned.

In addition, Compagnie des Bauxites de Guinée (CBG) is active in Guinea – a joint venture between the Guinean government (49%) and Halco Consortium (51%). CBG is a large and growing producer of bauxite aimed at metallurgical grades. Halco’s shareholders are Alcoa Worldwide Alumina and Chemicals (AWAC, 45%), Rio Tinto Alcan (45%), and Dadco Alumina & Chemicals (10%). CBG operates three mines in the Sangarédi area and began an expansion in late-2018 to bring capacity up to 18.5Mtpy. Another two further expansion phases are planned in future to take capacity up to 23.5Mtpy.

Historically, Guinea was an important producer of non-metallurgical, abrasive-grade bauxite with capacity of up to 200ktpy for calcined material. While this calcining capacity has long since closed, there is known to be at least some raw bauxite in the CBG deposit suitable for the production of abrasive grades and some Chinese producers of abrasive-grade bauxite are thought to have sourced raw bauxite from Guinea recently, to bolster shortfalls in domestic Chinese bauxite supply for calcining. Bauxite mined and intended for smelter-grade alumina production is sometimes also sold into non-metallurgical markets if it meets specifications.

Although China has significant domestic resources of bauxite, high-grade ores that are able to be produced economically are becoming more limited. Some producers have selectively mined ores with the highest grade for a number of years, effectively reducing the average alumina grade of many bauxite mines and causing a decline in final product purity.

In addition, there are considerable concerns about whether some existing Chinese deposits will ever be mined following the introduction of increasingly strict Chinese environmental policy. Global prices for bauxite and alumina (as well as those for other refectory minerals such as graphite and magnesia) increased strongly last year as a result of Chinese environmental inspections which resulted in temporary production plant closures and lower availability of supply. Although much of this production has now come back on-line, the threat of further closures still looms large with new inspections planned for early 2020.

EGA commissioned the Al Taweelah alumina refinery in April 2019, which is UAE’s first alumina refinery and only the second in the Middle East. The plant is expected to produce around 2Mtpy once full ramp-up is achieved. EGA built up its stockpile in advance of the commissioning and is thought to have received some material from the Australian Kwinana plan of AWAC in 2018.

The tenth edition of Roskill’s report on non-metallurgical bauxite and alumina is due to be released shortly and will include analysis of recent industry trends as well as providing forecasts over the next decade to 2029 and profiles of the main producers. Click here to download the brochure and sample pages for the report, or to access further information.

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This article was written by Suzanne Shaw. Please get in touch below if you wish to discuss further:

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