NDRC Promulgates Aluminum Industry Entrance Requirements

SHANGHAI Nov. 16 (CBI China)--On October 29th, the National Development and Reform Commission (NDRC) promulgated the Aluminum Industry Entrance Qualifications.  Requirements include:

1) A mining license is required for exploitation of bauxite resources.  The total capacity of proposed mine investment projects should be at least 300kt p.a., with the service length of more than 15 years.
2) The initial capacity of new alumina projects should be above 800kt p.a, and the proportion of self-exploited domestic bauxite mines should be more than 85%.  The service length of affiliated mines should be at least 30 years.  The initial capacity of new alumina projects using imported bauxite as feedstock should be more than 600kt p.a., and the projects should have long-term foreign bauxite suppliers.
3) Aluminum expansion projects will be subject to approval by the Central Government.  Only reconstruction projects for environmental protection and outdated capacity replacement projects will be approved by the China Central Government at the moment.  Reconstruction projects should have sufficient bauxite supply, reliable power supply and convenient transportation.
4) Capacity of new scrap aluminum recycling projects should be more than 50kt p.a., and new projects of current scrap aluminum recycling companies should have capacity of at least 20kt p.a.  Aluminum recycling reconstruction and expansion projects should have capacity of at least 30kt p.a.
5) New aluminum processing projects should mainly produce aluminum sheets, strips, foils, extruded tubes and industrial profiles.
6) Capital ratio of bauxite mines, aluminum smelting and recycling projects should be 35% or above.

    Over the past two years, China has made great efforts to curb surplus capacity in the aluminum industry.  However, investment in aluminum and alumina projects rose in 2007 along with increases in electricity-supply and resources-based product prices.  The objectives of the entrance qualifications are to curb overheated investments in the aluminum industry, save energy, and reduce pollution.

    According to the relevant regulation on new alumina projects, the China Central Government has a stricter control over projects using self-exploited domestic bauxite as feedstock than those using imported feedstock.