The World Bank identified aluminium as the 'high-impact, cross-cutting metal'. As a result, today's world intensely competes over securing bauxite ore, the raw material used to produce aluminium.
"I read... that every clay bank was a mine of aluminium and that the metal was as costly as silver. I soon after began to think of processes for making aluminium cheaply," said Charles Martin Hall, an American inventor, businessman, and chemist. He is best known for his invention in 1886 of an inexpensive method for producing aluminium. This process was also discovered at nearly the same time by the Frenchman Paul Héroult, and it has come to be known as the Hall–Héroult process.
Henceforth, the demand for non-ferrous metal, which was once even pricier than gold, has seen continual growth. Guinea, China and Australia lead the pack as the top bauxite-producing nations.
Guinea claims the top spot, boasting an annual output exceeding 115 million tonnes, while Australia and China follow closely with over 110 million tonnes and 86 million tonnes, respectively. Although other countries on the list contribute smaller quantities, their roles remain significant. India, Indonesia, Russia, Jamaica, Kazakhstan, and Vietnam each produce more than 10 million tonnes of bauxite annually, underscoring their importance in the global supply chain.
Tug of war between the United States and China
In Suriname, a South American nation, Chinalco—a state-owned Chinese mining and metal company—has laid claim to neglected bauxite reserves in the western part of the country. Meanwhile, in Australia, Alcoa, a major U.S. aluminium producer, is preparing to resume bauxite mining in an area abandoned a decade ago.
While China possesses significant bauxite reserves, the quality is generally lower compared to other regions. Much of China's bauxite is characterised by high silica content, making it less efficient and more costly to refine into alumina, the precursor to aluminium. In 2023, China's domestic bauxite production was around 70–75 million tonnes, covering only part of its aluminium industry's needs. However, the country's alumina and aluminium output far exceeds what domestic bauxite can sustain. In 2023, China imported approximately 140 million tonnes of bauxite, a record high, reflecting its heavy reliance on external sources. This is more than double its imports from 2016, when the volume was around 65 million tonnes.
Global cutbacks in bauxite mining, particularly in Guinea, the world's largest exporter of the material, as well as in Australia, Brazil, and China, have driven up bauxite prices. Over the past two years, the price of Guinean bauxite has surged by 50 per cent, while Australian bauxite prices have climbed 60 per cent.
Morgan Stanley, an investment bank, forecasts that alumina supply pressures may ease by the first or second quarter of next year. "Alumina supply has lagged aluminium since 2022, with significant losses in Europe and Australia," the bank official noted. "China, historically a stabilising force with its surplus capacity, has faced challenges this year. Its bauxite output is down by eight million tonnes, and inland refineries are struggling despite bauxite imports rising by over 14 million tonnes." The report highlighted the system's vulnerabilities, emphasising that China's new aluminium capacity is heavily reliant on Guinean bauxite, making the supply chain susceptible to disruptions.
Image Credit: https://www.lyellcollection.org/doi/full/10.1144/geoenergy2023-054
Critical raw materials and European dependence
"Access to bauxite is no longer just a matter of economics; it's a geopolitical chess piece," says Dr Alex Turner, a mineral economist. "Countries with vast reserves are leveraging this resource for strategic influence."
Thus, not only China and the United States but also other parts of the world are competing over raw materials with similar forces.
Critical raw materials (CRMs) are defined as essential for manufacturing, economic stability, and national strategic interests, with supply chains at significant risk of disruption. Definitions of criticality vary across regions, industries, and organisations and evolve over time. The European Commission's 2023 assessment of CRMs now combines bauxite and aluminium for consistency, but separate evaluations in 2020 highlighted distinct vulnerabilities in their supply chains. In 2016, global bauxite production was valued at €12.7 billion, while primary aluminium production was worth €86 billion. Between 2012 and 2016, the EU relied on imports for 87 per cent of its bauxite and 59 per cent of its aluminium needs. While both were deemed economically important, only bauxite was classified as a critical raw material in 2020. By 2023, bauxite and aluminium together have been designated as CRMs.
The EU's heavy reliance on imports is compounded by concerns over responsible sourcing, particularly in Guinea, which supplies most of the EU's bauxite. Weak governance in Guinea poses a significant risk to sustainable supply chains. In 2021, EU bauxite mine production accounted for just 0.4 per cent of global output, with Greece contributing 89 per cent of the region's output. However, EU alumina production, at 5.8 million tonnes annually, represented 5 per cent of global production. Ireland and Spain together accounted for over half of the EU's alumina output.
In contrast, Australia does not include bauxite or alumina on its critical minerals list, as their supply chains are deemed robust against disruption. Aluminium, however, is classified as a 'strategic material' in the country, reflecting its importance for strategic applications and strong international demand. The U.S. has deepened ties with Australia, the world's largest bauxite producer, through partnerships with companies like Alcoa. The planned resumption of bauxite mining in Australia signals an effort to boost U.S. access to high-quality bauxite while strengthening ties with a key ally. Under the U.S. Critical Minerals Strategy, aluminium and its raw material inputs are also recognised as essential to national security and industrial competitiveness.
_md.webp)
