Chinese Aluminum Enterprise Made Investment in Africa



Chinese Aluminum Enterprise Made Investment in Africa

Beside Aluminum Group, Weiqiao Group and Bosai Group, many Chinese aluminum enterprises have made considerable investments in Africa like CHICO, SPIC and TBEA.

CHICO

In March, 2007, CHICO, a Chinese group that had been dedicated to aid construction to Africa, and a group that had been engaged in African market for more than 20 years, obtained the exploration right of a bauxite covering an area of 559 sqkm in Boffa, Guinea. This is the first exploration right that Chinese enterprise had ever acquired in Guinea. After that, together with CYMG, Henan SDIC and China Coal Geology Group, CHICO initiated and established Henan International Mining Development Co., Ltd. to be responsible for the aforesaid exploration. In Oct., 2010, CHICO obtained special exploration right of this mine. According to the disclosure then, resource of the mining region reached 10 billion tons, of which 1.5 billion tons were over-40% “high-grade ore”. Based on the planning, CHICO will exploit bauxite as well as construct aluminum oxide plant and infrastructure like port, rail, power plant and reservoir, with a total investment of over USD 3 billion. On 20, Feb., 2012, when then Henan provincial governor, Mr. Guo Gengmao visited there, the opening ceremony was held on the scene. However, the subsequent development of the project was far from satisfactory. The camp area was well constructed and put into use in 2014 but the other goals have not been well achieved.

State Power Investment Corporation (SPIC)

Early in September, 2008, SPIC and Guinea government entered into MOU and obtained exploration right of bauxite in 3650 mining area. They also planned to work together for package development projects related to bauxite, aluminum oxide, electric power and road and port and logistic constructions. According to SPIC website, total resource in 3650 mining area reached 3 billion tons. It is high-aluminum, high-iron and low-silicon gibbsite-type bauxite with average content of aluminum oxide over 40%, alumina-silicon ratio over 15, average thickness of ore layer over 5 meters, opencast.

In September, 2009, SPIC’s wholly-owned subsidiary, China Power Investment International Mining Investment Co., Ltd. (China Power Investment International Mining Company) was established in Beijing, which signaled the Group’s strategy to march on international upstream resource. In September, 2013, SPIC International Mining Company and Guinea government entered into “Special Right Agreement of China Power Investment-Guinea Aluminum Industry Project”. Based on disclosed agreement content, SPIC will construct a bauxite mine in Sangarédi, with Phase One annual capacity of 12 million tons, commenced in 2014; it will also construct an industrial park in Boffa, Guinea. In Phase One of the park, an aluminum oxide plant with annual capacity of 4 million tons will be built, to be put into operation in 2020. Annual capacity can be expanded to 8 million tons later according to actual market condition. Along with the project, a power plant with installed capacity of over 250 MW and a deepwater port with annual throughput of 8 million tons will also be constructed. Phase One of the project enjoys the investment of USD 6 billion.

On 27, March, 2018, according to CPNN, SPIC Aluminum & Power Investment Co., Ltd. and SINOHYDRO BUREAU 3 CO., LTD entered into strategic cooperation frame agreement. The both sides will establish strategic partnership and be dedicated to comprehensive cooperation related to Guinea mining development project covering shares and business.

TBEA

Following SPIC, the Chinese leading manufacturer and contractor of electrical equipment, TBEA marched on aluminum investment in Guinea. In June, 2017, according to Commercial Office of Embassy of China, Guinea, TBEA planned to exploit Santou bauxite in Télémelé, Guinea. This bauxite was owned by BHP Billion, who decided to exit Guinea in 2012 and returned the exploration right to Guinea government. On 29, Dec., 2017, Guinea government officially approved its exploration right to TBEA.

According to disclosed information, the bauxite enjoys a total investment of USD 280 million and it will be put into operation in mid-2019, with early-stage annual capacity of 10 million tons and later will be increased to 30 million tons/year. TBEA will also invest in supporting aluminum oxide plant and electrolytic aluminum plant. The aluminum oxide plant will be with annual capacity of 1 million tons/year, estimated to be completed in June 2021. The electrolytic aluminum plant will be put into construction in about 2025; furthermore, in the long run, the project includes a hydropower station with installed capacity of 600 thousand kw along Amaria, a railway used for bauxite transformation and a deepwater port and so on.

Three Gorges Corporation

In August, 2011, China International Water & Electric Corp., affiliated to Three Gorges Corp., signed EPC general contract with Guinea government related to Kaleta hydropower station, Gambia River. The station will be given the installed capacity of 240 thousand kw, with construction period of 48 months and contract amount of USD 446 million, loans provided by EIBC. In June, 2015, Kaleta hydropower station was completed and put into use as schedule. In the same year, China International Water & Electric Corp. again was given the EPC general contract over Souapiti hydropower station, the upstream area of Kaleta hydropower station. The station will be given the installed capacity of 450 thousand ~ 510 thousand kw, with contract amount of USD 1.5 billion and construction period of 58 months, planned to be completed and put into use by the end of 2020. According to China International Water & Electric Corp., this project is an important part in overall development plan in Senegal basin. It not only well addresses the bottleneck of power shortage problem in Guinea but also helps to export power to neighbor countries like Gambia, Senegal and Mali, which makes contributions to interconnection of power grid in West Africa. On 14, June, 2018, Guinea government approved loan contract of this project. China International Water & Electric Corp. has made achievements that not only help to address Guinea domestic power demand but lay a good foundation for its aluminum oxide and electrolytic aluminum industry as well.