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Indonesia bauxite tough for China to replace: Reed

Keywords: Tags  bauxite, China imports, Indonesia ban, Demian Reed, Rio Tinto Alcan, Andrea Hotter


MIAMI — China has a few short-term alternatives to meet its bauxite needs if Indonesia’s ban on raw mineral exports persists, but the supply gap will be hard to fill, according to a senior executive at Rio Tinto Alcan Inc.

Indonesia’s ban on ore exports, which started last month, is creating uncertainty for 14 million tonnes of Chinese alumina refining capacity, Demian Reed, the Montreal-based company’s general manager of commercial bauxite and alumina, said at AMM sister publication Metal Bulletin’s 20th Bauxite and Alumina Conference in Miami.

China imported a record 71 million tonnes of bauxite last year, of which over 70 percent came from Indonesia, Reed added.

Much of the shortfall will probably come from Atlantic-origin bauxite, but there is some optionality on Pacific bauxite, he noted.

Alumina prices will get some support from the suspension of the Gove refinery (amm.com, Feb. 26), but that there is potential for further volatility this year, he said.

The Indonesian ban will affect bauxite flows and could put upward pressure on alumina prices, but if alumina curtailments do not keep up with smelting cuts this could push prices down, Reed said.

About 70 to 80 percent of new alumina production between 2013 and 2018 will come from China. This will require about 42 million tonnes of bauxite, equivalent to roughly the total amount of bauxite produced in Indonesia, he added.


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