Chalco to sell 135,000tpa aluminium smelting capacity quota to Yunnan Aluminium: Source

Aluminum Corporation of China Limited, popularly known as Chalco, announced on Tuesday, November 3, that it would sell a smelting capacity quota of 135,000 tonnes per annum to Yunnan Aluminium. Like Chalco, Yunnan Aluminium is also a subsidiary of state-owned Chinalco, the world’s biggest aluminium producer by capacity.

Yunnan Aluminium topped Chalco’s auction for the quota by bidding RMB 538.65 million ($80.64 million), excluding tax, according to Reuters report.

Yunnan Aluminium, based in southwest China’s Yunnan province, said that winning the quota would “help accelerate implementation of the company’s integrated hydropower and aluminium development strategy and further enhance competitiveness.”

Aluminium capacity transfers between regions are allowed in China, and it is the second time in two years Chalco transfers a capacity quota to Yunnan Aluminium. In 2019, it sold a smelting quota of 170,000 tonnes after shutting down its Shanxi Huasheng subsidiary and making a gain of RMB 800 million from the disposal.

China aims to cap overall smelting capacity at around 45 million tonnes per year to control emissions.

Chinalco acquired Yunnan Aluminium in 2018 as it sought to tap cleaner hydropower for the energy-intensive smelting process.