China has abundant bauxite resources. So far, it has proven reserves of 2.3 billion tons, ranking fourth in the world, and has the resources to develop the alumina industry. According to incomplete statistics since 2004, there are 27 alumina investment projects announced in China, with a total scale of 16.041 million tons. Even if we do not consider the use of foreign bauxite resources and projects to invest and set up factories overseas, the total scale has reached 28.941 million tons. At the end of 2006, Chinalco's alumina production was 9.52 million tons. In addition to the scale of alumina already under construction, there is also a total of 1.92 million tons of alumina planned to be built in the country, which is close to all the proposed (expanded) alumina projects in foreign countries. The rapid development of the alumina industry is different from the previous low-level repetitive construction, but on the scale and high level, optimizing the structure and greatly improving the overall level and competitiveness of China's alumina industry. However, if this investment heat continues to expand in disorder, it will inevitably lead to a relative surplus of products.
There are more than 40 alumina enterprises in China, and the capacity built and under construction has reached more than 43.5 million tons/year, of which the domestic bauxite capacity is 32.5 million tons/year. In 2010, the national alumina output was 28.96 million tons, making it the world's largest alumina producer.
The risks of investing in the alumina industry are different from other industries such as electrolytic aluminum in the following areas:
Process technology is relatively complicated
Under normal circumstances, the project takes about 2 to 3 years from the design and start-up to the formation of production capacity. The investment is high and the risk is high.
Market prices are ups and downs
The information asymmetry between the supply and demand sides further aggravates the volatile situation of alumina prices, which in turn will affect the investment income of the alumina project.
Need many skilled workers
In the aspects of project commissioning, commissioning and future production organization management, a large number of old experts and skilled workers who are proficient in alumina technology and practical experience are needed.
Dependence on resources and energy
With the increasingly fierce competition in resources at home and abroad, the high-quality resources suitable for the development of the alumina industry are increasingly scarce, and the investment in the alumina industry must consider the economic service life of the project.