China has, however, large bauxite resources. But the mine output there can only meet a portion of Chinese smelting requirements. Beijing in pursuit of a cleaner environment and progressive carbon emission reduction, has introduced stringent environmental and mining safety regulations leading to some mine closures and overall production restrictions. Moreover, over the years the quality of Chinese bauxite is falling giving a push to imports.

“Two and a half decades ago when China without fanfare launched a programme to build capacity for metals at great speed, it was with the knowledge that there had to be growing reliance on imports of minerals, be it bauxite, iron ore or copper concentrate. Before the world realised and also got concerned, China has sewed up import sources on a sustainable basis, tapping countries in Africa, Asia and Latin America,” says RK Sharma, director general of Federation of Indian Mineral Industries.

The world’s second largest economy after the US is around 60 per cent dependent on bauxite imports to feed its alumina refineries whose capacity at 2022 end reached 99.55m tonnes with capacity utilisation of 82%. According to China’s General Administration of Customs, the country’s imports of bauxite in 2023 were up 12.9% to 141.38m tonnes. In the current year, except for a dip in February to 11.275m tonnes from January’s 13.2019m tonnes, imports continued to ascend. Customs data shows imports in the first four months up to April amounted to 50.5798m tonnes.

Expectedly, Guinea where China continues to make large investments in mines and infrastructure development to facilitate movement of bauxite from mines to ports, are neck and neck with Australia in terms of production. Between January and April, Guinea shipped 37.4938m tonnes of bauxite to China that constituted 74.13% of its total imports. Australia, which is the world’s largest producer of bauxite after Guinea, remained the next important import source for China having received cargoes of 3.1345m tonnes in April. That month saw Turkey, Ghana and Montenegro overtaking Brazil in supply of bauxite to China. In the meantime, bauxite supply from domestic sources remained under pressure in view of production suspension in Shanxi and Henan output did not ease to any great extent.

What cannot be taken away from China-Australia relationship is the complementarity of the economies of the two countries – Australia being a large producer of minerals from coal to iron ore to bauxite and China needing all these to run its gigantic industrial machinery. Their trade relationships have been historically strong to the extent that in 2020, nearly half of Australian exports went to China. But these came under cloud as recent years were marked by accusations of human rights violations by each other. Moreover, each perceived threat to its national security from the other. Beijing did not hide its concern when Canberra joined the Quadrilateral Security Dialogue that also has the US, Japan and India as members. Then the Australian suggestion that there should be an independent inquiry into the Covid-19 outbreak in China enraged Beijing to use economic coercion against the trading partner. Through the ups and downs in relationships, Beijing has made one irreversible decision not to be overdependent on Australia for bauxite or any other mineral but diversify supply base. That will largely explain the meteoric rise of Guinea as a producer-exporter of bauxite.

Commodity intelligence provider Kpler says in a report that China’s domestic alumina production was almost flat during January to April “with some capacity idled due to bauxite supply constraints.” The period was marked by a 20% setback in domestic bauxite production to below 18m tonnes. This was sought to be made good by stepping up imports (a year-on-year rise of 2.54m tonnes). But that proved to be insufficient to “bridge the deficit.” No wonder Chinese alumina industry inventory of bauxite hit a nearly 28-month low.

Any major uptick in imports from Guinea is not likely during the six-month monsoon there from June to November when ore extraction and its transportation become a challenge. As it happened in 2023, the monsoon period saw supply easing 6.7% or 3.96m tonnes over the previous six months. At the same time, commissioning of new capacity in Guinea could lead to some extra availability of bauxite for exports. Incidentally, around 80% of Guinean bauxite exports is China bound. The West African country accounts for around 25% global exports of the commodity.

Credit for emergence of Guinea, a politically unstable and extremely poor country, as a leading exporter of bauxite (this is also going to be the case with iron ore once Simandou project with the world’s largest untapped reserve of high-grade ore is finally commissioned overcoming years of challenges of ownership and corruption claims) goes principally to China. At the same time, Anglo-Australian mining giant Rio Tinto, the US aluminium group Alcoa and some high-risk taking investors continue to play important roles in building mining capacity in Guinea. In the world bauxite reserves of 30bn tonnes in 2023, Guinea with 7.4bn tonnes has the maximum share among all mineral owning countries. That besides, the Guinean gibbistic ore for its high alumina content of 44% to 46% and low reactive silica of up to 1.5% compels serious attention of China and others despite all inherent political and logistical challenges.

Next in the bauxite reserves owning table is Vietnam with 5.8bn tonnes. The others in terms of ownership sizes are Australia 3.5bn tonnes, Brazil 2.7bn tonnes, Jamaica 2bn tonnes, Indonesia 1bn tonnes, China 710m tonnes but of declining ore quality, India 650m tonnes, Russia 480m tonnes, Saudi Arabia 180m tonnes and Kazakhstan 160m tonnes. The balance of world reserves is spread among countries in all continents. “The good thing about reserves is more you invest in exploration, bigger becomes the volume of reserves. Mining has always been a cornerstone of the Australian economy.

The strongly export-oriented sector with minimal onshore processing of ore had a 13.6% share of GDP (gross domestic product) in 2023. Investment in mining science technology in a sustainable way and investment friendly mining policy are the prime reasons why the country’s reserves from iron ore to bauxite to lithium have continued to increase,” says Sharma. Going by the Australian experience and on assumption that other major bauxite owning countries will follow that example, the world aluminium industry will always be assured of adequate bauxite supply. Moreover, the silvery white metal being perennially recyclable with all its qualities remaining intact, it is globally coming back for reuse in bigger volumes all the while.(IPA Service)