Chinalco is the largest alumina and primary aluminum producer in China, one of the fastest growing major aluminum markets in the world.
Chinalco also has a significant presence in the global aluminum business. At the end of 2007, Chinalco was the second largest producer of alumina worldwide, as well as the third largest producer of aluminum.
To achieve higher margins, Chinalco continues to work to vertically expand its operations in the production of fabricated aluminum. Over the past seven years, Chinalco’s production has grown rapidly. Since 2001, Chinalco’s production of:
In 2007, Chinalco produced:
The majority of Chinalco’s high quality bauxite, alumina, primary aluminum and fabricated aluminum businesses are located in mainland China. However, Chinalco is committed to expanding its mining and processing businesses internationally and on a global scale.
Chinalco’s Alumina and Aluminum Business Unit is divided into three principal business segments according to steps in the aluminum production process:
Alumina is chemically refined from bauxite and is the key raw material for producing primary aluminum, which in turn is the key raw material in aluminum fabrication.
In addition, Chinalco produces and sells a comparatively small amount of alumina chemical products, including alumina hydrate and alumina-based industrial chemical products, as well as carbon products (including carbon anodes and cathodes) and gallium.
Chinalco’s refineries are located in most cases close to abundant bauxite reserves in order to reduce transportation costs. Chinalco’s bauxite supply is procured principally from three sources:
Chinalco is not dependent on any single supplier or small group of suppliers for its bauxite requirements. Chinalco is focused on exploring new bauxite reserves and streamlining its bauxite procurement system to support the growth of its alumina production.
Chalco has invested in Australia’s Aurukun Project which is intended to be developed into a bauxite mining and processing facility to produce alumina.
Primary aluminum ingots are the major product in this business unit. Chinalco’s standard ingots are 20-kilogram remelt ingots used for general aluminum fabrication predominately by the automotive, construction, power and consumer goods industries.
Chinalco also produces a number of higher-end primary aluminum products for certain special industrial applications.
Chalco, together with Malaysia Mining Company (MMC) and Saudi Arabian Binladin Group (SBG) has entered into a cooperation framework agreement to jointly construct a primary aluminum smelter with an annual capacity of 1 million tonnes in Saudi Arabia. This smelter will have lower production costs as it will be able to use low-cost local heavy crude for electricity generation.
Chinalco continues to expand capacity in this high-end segment of its business through the development of existing infrastructure and fabrication processes, as well as acquisitions of complementary businesses. Chinalco’s key fabricated aluminum products include high precision aluminum plates and belts and aluminum alloys used primarily by the aviation and aerospace, consumer goods and automotive industries. In 2007, most of Chinalco’s fabricated aluminum outputs were supplied to customers in China.
Access to secure competitively priced electricity is vital in the aluminum industry. In China, Chinalco owns and operates power plants which generated approximately 11,000 GWh in 2008. To the extent that the electricity generated by these plants is insufficient to meet Chinalco’s needs, Chinalco purchases the shortfall from regional power grids pursuant to power supply agreements at tariffs mandated by the local authorities.
Since its founding in 2001 Chinalco has pursued a strategy of continual improvement and as a result has reduced energy consumption in its refining, smelting and production facilities, through the introduction of energy-saving technology and streamlining production workflow.