Southwest China's Guizhou province is fast becoming the destination of choice for aluminum producers, as friendly policies and the easy availability of raw materials are spurring a shift from its erstwhile bases in central and eastern China, officials and experts said.
"Guizhou's abundant bauxite resources have given the province an edge in developing aluminum production. We are also working to bolster a better business environment for investors with supportive policies and better infrastructure. The goal is to make Guizhou a national hub for aluminum production," Ma Lei, head of the Guizhou Investment Promotion Bureau, said in remarks on behalf of vice-governor Lu Yongzheng at a recent industry forum.
Bauxite is the raw material used to produce aluminum products in many industries.
Guizhou has deposits of an estimated 162 million metric tons of bauxite, making up about 18 percent of the country's total and ranking fourth among all regions, trailing only central China's Shanxi and Henan provinces, and the Guangxi Zhuang autonomous region, said investment information provider Hithink RoyalFlush Information Network Co Ltd.
The southwestern Chinese province has multiple aluminum production hubs, including those in the capital city of Guiyang, Zunyi city, and the Qianxinan Bouyei and Miao autonomous prefecture, Ma said.
The rise of Guizhou came at a time when production bases in Central China's Henan and North China's Shanxi provinces have seen many bauxite mines shut down in a bid to battle pollution.
"China's demand for bauxite continues to grow but the supply fell. That gives other bauxite-rich areas, mostly in Southwest China like Guizhou, an opportunity for development in aluminum production," said Cheng Wenchao, an analyst from consulting firm Aladdiny which is specialized in the bauxite industry.
China's demand for bauxite was buoyed by a surging need for aluminum oxide, said Cheng. Aluminum oxide output in China surged to 71.8 million tons in 2018, from 7 million in 2004.
"As the growing need for bauxite outpaced domestic supplies, which has led to higher prices of bauxite, many companies have switched to overseas producers, such as those in Australia and Indonesia," Cheng said.
Total bauxite imports by mainland companies are expected to reach 18 million tons in 2019. The number is likely to hit 140 million tons by 2025, Aladdiny data showed.
"Aluminum production in Guizhou was also challenged as aluminum oxide and electrolytic aluminum, two major aluminum products, still have a relatively low market share compared with other competitors," Cheng explained.
Ma said Guizhou province will step up efforts in advanced manufacturing and high-end production to move up the global value chain.