China Hongqiao: Plan to shift aluminium output on track despite Yunnan's power woes

China Hongqiao

01/11/2022 03:50

By Siyi Liu and Dominique Patton
       BEIJING, Nov 1 (Reuters) - China Hongqiao Group
 1378.HK  will stick to its plan of moving 2 million tonnes of
capacity to the country's southwest by the end of next year
despite recent electricity supply disruptions there, the world's
top private aluminium producer said.
    Hongqiao has previously said it will move more than 60% of
its 6.46 million tonnes of capacity to Yunnan province from
northern Shandong province by end-2025 to allow it to access the
region's abundant hydropower and reduce its carbon footprint.
    It had already built 850,000 tonnes of capacity in the
province by June this year, and will have a total 2.03 million
tonnes of capacity in its Yunnan Hongtai plant by the end of
2023, Ron Knapp, adviser to the office of the chairman, told
Reuters on Monday.
    The relocation is going ahead despite recent disruptions to
power supply in Yunnan, after lower-than-usual rainfall this
year reduced hydropower generation.
    The government ordered primary aluminium producers to cut
their power usage by at least 10% in September. One major local
producer told Reuters last week that the power curbs have been
expanded to 20% from October.  
    "I see that as a short term issue. We are building for the
long-term, and I believe Yunnan is building for the long term as
well, with plans for wind and solar as well as energy storage,"
Knapp said. 
    Hongqiao's relocation of aluminium smelters from its base in
Shandong to China's southwest will by far be the world's biggest
relocation of aluminium capacity, according to Knapp.
    "We are expecting 75% of our carbon footprint to be
addressed through moving out of fossil-fueled electricity,"
added Knapp.
    The company launched two 'green' aluminium brands last week,
one with recycled aluminium and the other from low-carbon
aluminium which will come from metals produced in Yunnan using
hydro electricity and also other renewables.
    Electrolytic aluminium capacity in Yunnan province had risen
to 5.61 million tonnes at the beginning of September from 3
million tonnes in 2018, according to information provider
Shanghai Metals Market.
    Other aluminium producers including Aluminium Corporation of
China Ltd  601600.SS  and Sunstone Development Co Ltd
 603612.SS  have also announced plans to move capacity to
Yunnan. 
 (Reporting by Siyi Liu and Dominique Patton; Editing by
Muralikumar Anantharaman)
 ((Siyi.Liu@thomsonreuters.com;))