China-based Henan Shenhuo to transfer its aluminium smelting capacity to Yunnan

According to a provincial government notice, the China-based company Henan Shenhuo Coal and Power Co, which is primarily engaged in ferrous metal processing, the coal mining, and deep processing electrolytic aluminium, is about to transfer more than 450,000 tonnes per year of aluminium smelting capacity to the southwestern province of Yunnan. The company has completed all the required transfer formalities as well, said the Yunnan Industry and Information Technology Commission on Monday, May 21, 2018.

This represents the first phase of a 900,000 tonnes per year two-phase integrated hydropower and aluminium smelting project that Shenhuo is building in Yunnan, it said. The construction work is expected to begin on July 18 and production to start in a year.

This move by Henan Shenhuo is significantly due to province’s increasing popularity as a location of aluminium smelters in China. A large number of aluminium companies are keen to tap Yunnan’s extensive hydropower capacity to replace their current coal-fired plants for securing power required during the electric-intensive smelting process. According to Jackie Wang, an aluminium analyst at consultants CRU in Beijing, this hydropower capacity, an alternative to coal-fired power generation will help smelters to produce “green metal”.

China’s Ministry of Industry and Information Technology has already started allowing smelters to move or acquire new capacity in regions that have available quotas. In that respect, Wang said, “Yunnan is a hot spot,” noting that another Chinese smelter, Sichuan Qiya, had recently decided to relocate 350,000 tonnes per year of capacity to the province.

The 451,100 tonnes of capacity in Yunnan is estimated to replace a total of 510,000 tonnes at three plants in the central Chinese province of Henan that the group has already closed down.