“Aluminium is a green metal and it is going to replace a lot of other materials in many places”, Mr. Niu Heng, Senior Manager, Chalieco

Mr. Niu Heng is the senior manager of China Aluminum International Engineering Co. Ltd (Chalieco). He has almost 26 years of experience in the non-ferrous metals industry and more than 10 years of working relationship with Indian Aluminium Industry. He started with international technology and equipment procurement in China National Non-Ferrous Metals Industry Corp. (CNNC) and joined Chinalco in 2001 in the field of Chinese alumina and aluminium technology. AlCircle had the opportunity to interact with Mr. Heng during the IBAAS Symposium in Vizag and he shared some interesting inputs on the Chinese aluminium industry as well as on the aluminium situation in general.

AlCircle: Chalieco has been working closely with the Indian aluminium industry for pretty long. Please share with us your experience in India.

Mr. Niu Heng: We started working in India in 2003. Actually, the first contract we signed was with Kutch Aluminium in Gujarat in 2001, but that project was suspended. Then we signed a contract for technology transfer and engineering with Balco in January 2003, which happened to be the first project in India using Chinese technology in aluminium industry. Balco project was very successful and was commissioned at the end of 2004. It is the first smelter project commissioned in 24 months in India. Then we worked with various companies like Vedanta, Hindalco and Ashapura in the last 10 years and designed aluminium smelter capacity of 2.8 million tons per annum in total. In alumina, we have designed 3 million tonne per annum expansion of the Lanjigarh refinery for Vedanta. Unfortunately the project has not been commissioned yet due to the lack of bauxite.

Balco just started their potline for the expansion project with 325ktpa and Vedanta also started their potline in Jharsugura for the project of 1,250ktpa. Now, things have really started gaining momentum, as the projects, except Lanjigarh, begin to move.

For Hindalco we provided technology for upgrading their old pots, improved the power efficiency & performance of the pot and expanded the capacity. A small pot line of 80 pots was commissioned, which was specially designed with our 235KA technology.

We are grateful to all of our clients in India who have patronized and trusted Chalieco continuously. The Indian aluminium industry overcame a lot of difficulties in the past to come to today’s stage. We are happy that we were standing by our Indian clients when they were facing problems. I believe Indian Aluminium industry will overcome difficulties in the future too and prove itself to be one of the most efficient, sustainable and competitive industry in the globe.

AlCircle: Chalieco has been associated with IBAAS consecutively for the 2nd year. Please share with us your experience with IBAAS.

Mr. Niu Heng: IBAAS started working together with Chalieco in 2012 after the first IBAAS Symposium in Nagpur, India in 2012. Chalieco was keen to work with the Indian aluminium industry. We jointly organized the second IBAAS Symposium in Nanning, Guanhxi, China with IBAAS committee and Antaike from China followed by a visit of delegates to the alumina refinery of Guangxi Branch of CHALCO in November 2013

I feel IBAAS is doing pretty well and is sincerely working towards the benefits of our industry. The only thing is that it should not only be confined to India-China, it should be international like the name IBAAS implies - International Bauxite, Alumina and Aluminium Society. The aim is to build a platform of global technical exchange on the bauxite, alumina and aluminium industry. We need to make more efforts and have a long way to go.

AlCircle: You are closely involved with a number of projects in India. We would like to know something about the primary aluminium scene in China.

Mr. Niu Heng: In China, new capacities are coming up but a big percentage of old capacity is being shut down, because of low price and high energy cost. Originally, the aluminium industry in China was primarily based in the central regions, where bauxite was available and power was inexpensive. But in the last 10 years, power prices have gone sky high and people have migrated to the west to build smelters close to the coalmines and have also set up power plants. The western region refers to Xinjiang, Qinghai, Ningxia and Gansu which is covered mostly by mountains and deserts and is rich in coal deposits. It is scarcely populated and not developed which is why power consumption is very low there. For example, the population in Qinghai province is 5.73 million while area is 720 thousand square kilometers, 8 capita per square kilometer. Energy cost in these areas is around 0.15-0.2 yuan per unit if you have CPP whereas in the east, it is around 0.5 to 0.6 yuan per unit from grid. The disadvantage of the western region is that raw materials have to be brought in and the metal has to be sent out because the consumption in those areas is low. This creates a logistical problem.

It is time for the Chinese aluminium producers to consider building their capacity outside China.

AlCircle: Please share with us the current bauxite alumina situation in China after the implementation of Indonesian ban on bauxite export.

Mr. Niu Heng: Alumina production in China increased fast despite the non-availability of bauxite in the country. In places that have bauxite like Guangxi, the saturation of the industry is already very high. In Guangxi there is almost 7 million tonnes per annum of production – from a single province. There are three big refineries in the region. Wherever there is a little bauxite, the place is occupied with alumina producers. Besides the local bauxite, a lot of refineries based on the imported bauxite are there in Shandong province in the east coast of China.

Now China is importing almost 50 million tonnes of bauxite from all over the world. Last year, Weiqiao, one of the big alumina producers in China, kept nearly 25 million tonnes of bauxite as inventories at the ports, enough to sustain their refineries for half a year. Now, China imports from India (Ashapura and a number of other suppliers), Australia, Malaysia, Guinea, Brazil and wherever bauxite is available. There are also plans to set up refineries in places like Indonesia and Guinea so that they can bring the alumina back for smelting. I feel, considering the high power costs in China, the Chinese should not bring back alumina for smelting in China. Instead, they should set up smelters, produce primary aluminium outside and bring back the ingots. That would be much more cost-effective. In addition, if Indonesia has put a ban on the export of bauxite in 2014, other countries may follow the same in the future. So a long-term solution needs to be worked out.

AlCircle: Is there a cost difference between importing bauxite from Indonesia and from other countries?

Mr. Niu Heng: In Indonesia the bauxite prices were competitive, lower than places like India. A lot of refineries prefer to use Indonesia bauxite. That is why Weiqiao took whatever quantity they can take from Indonesia in 2013.

AlCircle: Chalieco has played a key role in upgrading the aluminium smelting technology in China. Please brief us a little on that.

Mr. Niu Heng: In the last 10 years aluminium smelting technology has been developed a lot. The 300K technology became prevailing technology at the beginning of the century. Then 400KA and 500KA came and became standard size. Actually the high amperage pots do not guarantee more efficiency and more competitive production and power savings. They however offer space savings and less operational manpower. Earlier, higher manpower was not an issue as salary was low in China. Now as the manpower costs rise, smelters prefer higher amperage pots. We can offer 300K, 400k and 500k pots and 600K pots are also under trial. When we are developing new pot, we also try to reduce the power consumption of the existing pot lines. By making various modifications on the existing pot, we can reduce power consumption to less than 12,700-12,800 units per ton.

AlCircle: Please share your views on how aluminium industry can contribute towards recycling, carbon economy and sustainability.

Mr. Niu Heng: It is possible to do a number of things with the waste in the alumina refineries. Earlier material prices were low so the botheration was about how to dump the red mud rather than how to reutilize it. But now the time has come when all the resources are becoming expensive. You have to dig as much as possible value from the bauxite. Chalieco designed the iron extraction plant for Guangxi Branch of Chalco, which is now in commercial operation. The facility could extract 50% of iron contained in the red mud. In addition, the iron ore extracted from red mud is rich in some elements which can improve the quality of steel, that is why, iron ore from red mud is welcomed in the market even it is fine. However, in my opinion we need to improve the process to extract more iron, maybe to at least 70% of the iron in the red mud so that resource could be more efficiently used. With the technology Chalieco developed, the investment of the facility can be recovered in 2-3 years.

From the smelter side, main focus is in the spent potliners. Now smelters have started treating the waste material in a better way in order to protect the environment as well as to help smelters improve their economic efficiency.

In the downstream sector also we have come up with some technical innovation for rolling mills. Rolling mills use oil based lubricants. The lubricant gets evaporated during rolling. Chalieco has designed a recovery system to collect the fume and get it treated and reused. This will not only improve the economy of production but also help in protecting the environment.

All of the above is about how to make aluminium industry environment friendly and sustainable. However, if you look at all the raw materials including steel, non-ferrous metals, chemicals, cement etc., you can say aluminium is a green metal. It is going to replace a lot of other materials in many places. We need to make more effort in setting up efficient aluminium recycling system in developing countries like India and China. This helps the sustainable development and reduces CO2 emission.

AlCircle: With your experience as an aluminium industry professional; do you think that e-commerce & digital media can work well in the aluminium sector?

Mr. Niu Heng: Internet and software have already entered the industry with companies using ERPs. There are other ways in which e-commerce can be implemented in aluminium. If upstream companies do e-auction of alumina instead of the traditional tendering system, it becomes much less time consuming and easier. A qualified bidder can be found with a single click without repeated email communication. All the qualified bidders will get easy access to information and the entire process becomes a lot easier. This is one simple example of how e-commerce can help in the aluminium industry. In my opinion, the scope of e-commerce lies more in downstream. In downstream, there are many products for which users will be willing to use the E-commerce platform. The only thing that needs to be maintained here is the product quality assurance.

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