Ge Honglin: Coordinating Domestic and International Relations to Enhance the Security of Aluminum Ore Resources

Just now, everyone shared valuable opinions and suggestions. The association will carefully absorb and actively study these inputs. For matters related to national policies, the association will convey them to relevant national departments and provide recommendations. For example, regarding the elimination of blind spots, establishing Chinese banks, insurance, accounting, and law firms in Guinea. For industry-related association work, we will actively study and adopt suggestions, such as collaborating with Chinese enterprises to research the development plan for Guinea's aluminum industry and the conversion of Chinese standards for the aluminum industry.

This is my second visit to Guinea. The first was in September 2015, when I came for the development of the Simandou iron ore project. However, Guinea's abundant bauxite resources deeply attracted me, sparking the idea of Chalco's investment. After 10 years, Guinea's economy has undergone tremendous changes, with GDP growing nearly 200% from $8.778 billion in 2014 to $25.808 billion in 2024. I personally believe that Chinese enterprises' large-scale investment and development of bauxite in Guinea not only effectively supplement China's bauxite resource gap but also significantly drive the construction of infrastructure such as roads, railways, ports, and energy in Guinea, promoting its economic and social development. The past decade has proven that Chinese enterprises' investment in Guinea's aluminum industry is the right direction with remarkable achievements. The enterprises and entrepreneurs present here have made significant contributions. In this regard, our international publicity, including in Guinea, has been insufficient. Proper publicity will help gain further understanding and support from the Guinean government and society.

Taking this opportunity, I would like to share five points on Chinese enterprises' investment in Guinea's aluminum industry for your reference.

This raises two questions: First, should a reasonable ratio between domestic and imported bauxite be established for China's alumina production? Second, should a reasonable distribution of bauxite import sources be established? The answer is clearly yes. In terms of domestic and overseas supply ratios, the bottom line for domestic ore needs to be determined—whether it is 20%, 30%, or 40%. For imported ore, the bottom line for Guinea's share needs to be determined—whether it is 70%, 60%, or 50%. Assuming an extreme scenario of 20% domestic ore and 70% Guinea bauxite, Guinea would only need to supply 112 million mt (2.0*0.8*0.7). This figure already exceeds China's 2024 Guinea bauxite imports of 110 million mt and is lower than the 2024 production of 120.5 million mt by enterprises such as Chalco Boffa, SMB-Winning Consortium, SPIC, Henan International, and Zibo Rundi Jinbo, and even lower than the 140 million mt expected after new projects in Guinea in 2025. The surplus will force us to redirect sales to other regions worldwide. Even if we partially convert to producing alumina locally in Guinea, transporting alumina back to China will directly reduce domestic bauxite demand.

To enhance the security of international resource development and acquisition, it is essential to balance domestic, international, and country-specific supply ratios. Currently, we face two major issues: the rapid decline in domestic ore supply and the excessive concentration of imported ore sources. We must not recognize these issues early but act slowly.

For the former, we must rely on a new round of domestic mineral exploration to increase bauxite reserves and production. Leveraging reforms in national mining rights policies, we should intensify bauxite resource surveys and exploration, enhance domestic resource reserves, especially promoting resources like coal-underlying bauxite and high-alumina fly ash, to ensure the security of bauxite supply in China's aluminum industry chain. For the latter, we must pay high attention to country-specific risks. Mining in a single country is not necessarily better with higher quantities. Without a comprehensive balance between domestic and non-Guinea ore, leading to disproportionate ratios, reliance can turn into dependence, planting future security risks. Everyone must think calmly. Additionally, with some enterprises committing to second and even third phases, and other Chinese enterprises attempting to join, the risk of concentration will further intensify. Numerous past examples show that excessive concentration in a single country inevitably leads to tighter government policies and controls. If enterprises fail to fulfill commitments made to secure resources, they can easily become targets of sanctions.

From our survey, Chinese enterprises' bauxite development in Guinea has formed distinct characteristics. One category includes industry enterprises developing bauxite resources to extend and improve their aluminum industry chain, strengthening their core business. Another category includes cross-industry enterprises leveraging international trade and infrastructure construction advantages to engage in bauxite resource development. It is important to note that enterprises entering bauxite development solely for profit must fully understand domestic and international market changes, especially long-term demand trends, and formulate development plans. In summary, we must highly prioritize country-specific risks to enhance the security of international resource development and acquisition.

Yesterday, we visited the SMB-Winning Consortium's Emerald Renhe Hospital, which left a very positive impression with its excellent medical conditions and environment. It is a good project that integrates into local society and benefits the local population. In the future, Chinese enterprises investing and developing in Guinea must fully recognize and enhance the fulfillment of corporate social responsibilities.

First, lead by example in green and low-carbon development. Actively participate in the investment and construction of green and low-carbon projects, introduce advanced low-carbon technologies and equipment, improve resource utilization efficiency, reduce carbon emissions, and ensure no pollution incidents, harmonizing project construction with the local ecological environment. Establish an internationally aligned carbon footprint management system from a strategic development perspective, which is not only socially responsible but also a crucial measure to enhance corporate international competitiveness.

Second, enhance corporate image and deepen friendly community building. Chinese enterprises have established good development relationships with local communities during bauxite development. We must fully summarize past experiences and continue to deepen friendly community building. By listening to community needs and participating in community development, we can better integrate into the local area and strengthen trust relationships with the community. While providing employment opportunities and local talent development to improve livelihoods, we must also fully consider community welfare and development, which not only enhances corporate image but also ensures the long-term stable operation of our projects locally.

Third, form synergies and strengthen government-enterprise communication. Chinese enterprises must establish communication with local governments to gain high-level understanding and support. Central state-owned enterprises and state-owned enterprises should play a leading role, forming a community of shared destiny between state-owned and private enterprises.

Chinese enterprises investing abroad must unite, cooperate, be inclusive, and share benefits. From our survey, some enterprises have further established cooperation channels and methods for information sharing and material assistance. In the future, we must further deepen unity and cooperation for mutual benefit.

First, further deepen collaborative sharing. Make more efforts in the standardization and collaborative storage of transportation channels and infrastructure construction such as railways and roads, alumina projects, and materials, equipment, and spare parts, enhancing the shared support capabilities among enterprises in Guinea. This will not only improve individual enterprise operational capabilities and cost efficiency but also maximize the collective interests of Chinese enterprises.

Second, further strengthen joint problem-solving. Through regular exchanges and symposiums, identify common challenges encountered in local mining, transportation, and other practical work processes, and resolve them through joint scientific and technological efforts. This can achieve collective wisdom and resource synergy.

Third, further avoid overseas "cut-throat competition." "Cut-throat competition" is highly detrimental to the healthy development of the industry. Once it occurs, it is often difficult to self-repair or eliminate, with some repairs taking a long time and others incurring significant costs. Currently, domestic efforts are being made to address industry "cut-throat competition." We must learn from domestic experiences and lessons, effectively avoiding overseas "cut-throat competition" among Chinese enterprises in Guinea, which could weaken their position and bargaining power, resulting in overall interest losses.