China Hongqiao plans hydropower based “green aluminium” industrial park in Yunnan

China Hongqiao Group is planning to set up a “green aluminium” industrial park in Southwest China’s Yunnan capitalizing on the hydropower resources of the province, a statement from affiliate firm Shandong Weiqiao Pioneering says. A number of Chinese aluminium producers, including Aluminum Corp of China, or Chinalco, and Henan Shenhuo, have been focusing on Yunnan, because of the easy access to cleaner hydropower for the energy-intensive smelting process.

Hongqiao Chairman Zhang Bo attended a signing ceremony with Yunnan government officials in Kunming on Tuesday. According to the statement, government will work together with Hongqiao to set up the park, according to the company statement.

In China, Hongqiao is also known as Weiqiao. Hongqiao will be the main investor in the park construction, developing an integrated hydropower and aluminium project. However, the company has not made any official statement on the park location and the production capacity of the plant.

The news also appeared in the website of China Nonferrous Metals Industry Association, which said that Hongqiao was planning to build a 2-million-tonnes-per-year integrated aluminium smelting and hydropower project in southeast Yunnan’s Wenshan prefecture. It also said the construction is likely to start by the end of 2019.

Yunnan vice governor Dong Hua also said that Hongqiao was “in the process of discussing this issue.” He, however, did not specify the plant capacity or location.

Hongqiao has an annual smelting capacity of almost 6.5 million tonnes of aluminium in Shandong including 2.68 million tonnes of closed capacity, which was shut in 2017 for production licence issues. Hongqiao would needs more capacity quotas in order to expand in China. According to CRU Group Hongqiao is not likely to change its total capacity and this project could be a relocation of its existing capacity.

Hongqiao’s move also indicates the slow geographical shift of China’s aluminium sector to remote southwest areas such as Yunnan from the smelting heartland of Shandong in the east to leverage on hydropower.