Chinese aluminium giant Tianshan Aluminium moves overseas to acquire three bauxite mines in Indonesia

The Chinese aluminium producer Tianshan Aluminium Group, located in Shihezi, a sub-prefecture-level city in Northern Xinjiang, announced its plan to procure three bauxite mines in Indonesia for USD$30.3 million.

On February 23, 2023, the Chinese company engaged in comprehensive aluminium production and sales, Tianshan Aluminum’s units, signed a deal to buy Inti Tambang Makmur and obtain the mining rights of three Indonesian mines with a total of over 30 million dry metric tonnes of bauxite.

However, according to the previous announcements, negotiations between the two parties were initiated in August 2021, when they inked a cooperation intention agreement.

Tianshan Aluminum stated that acquiring the Indonesian bauxite projects is the Chinese aluminium company's first overseas expansion. It intends to seek more opportunities worldwide to obtain high-quality resources.

This decision of the Chinese aluminium came following, the declaration on December 20, 2022, by the Indonesian President that the nation would ban bauxite exports, the primary ore source of aluminium, starting from June 2023 to boost the domestic processing of the material.

AlCircle's new 'Global Aluminium Industry Outlook 2023' indicates the unfastening of the Covid restriction will result in the recovery of the Chinese real estate sector, and the booming new energy industry will propel the demand for aluminium.

This also needs to remember that aluminium's supply capacity will significantly impact producers' cost and sustainable operation, given the supply bottleneck of domestic bauxite mines.

Tianshan Aluminum's smelter has an annual production capacity of 1.2 million tonnes. The Group earlier stated that it expects net profit to have fallen 34 per cent to USD$2.3 billion (RMB16.2 billion), while revenue has leapt 14 per cent to USD$ 24 billion (RMB165.6 billion) from 2021.