Global bauxite resources are estimated at 55-75Bt. Grades are dependent on region and deposit formation. High quality bauxite contains high alumina content of over 47%, and low reactive silica content of less than 4%. China’s domestic supplies of bauxite are diasporic and while high in alumina concentration, are costly to process due to high silica content. This has led alumina producers in China to increasingly look to the seaborne market to import bauxite.

Guinea has the largest bauxite reserves in the world, with the USGS reporting 7.4Bt, followed by Vietnam (5.8Bt), Australia (5.1Bt), Brazil (2.7Bt) and Jamaica (2.0Bt). Australia was historically the largest producer, followed by China and Guinea. Including supplying its significant refining capacity, Australia was also the largest exporter until Indonesia ramped up its own exports to feed the rapidly increasing capacity in China.

However, Indonesia announced a ban on bauxite exports from June 2023 in order to accelerate the development of its domestic refining and processing of the mineral. This is not the first time Indonesia has banned the ore, as it had previously placed a restriction on the export in 2014, before lifting the ban in 2017. The ban back then had seen China rework its bauxite supply chain to largely rely on Guinea, who has since become the biggest exporter after rapidly increased production.

Once the largest supplier of bauxite to China, Malaysia has since maintained a bauxite mining ban since 2016 but was lifted in 2019 on account of strong demand for the ingredient. Instead, a cap on bauxite exports was imposed at 600kt per month. The upcoming bauxite export ban in Indonesia will see China shift to alternate countries to supply the mineral, of which Malaysia will likely be a key supplier. In recent years, the export cap has not been met, leaving room for the country to meet the demand from China without any modifications.

Seaborne Market

Significant volumes of bauxite remain captive to or associated with local refining capacity and does not reach the seaborne market. As such, there are a relatively small number of countries with sufficient bauxite production available for export.

The vast majority of the seaborne bauxite find their way into China. Beyond some European—and previously US refineries—without access to domestic resources, the sheer size of China’s alumina refining industry has seen a seaborne market for bauxite grow. China’s declining bauxite grades leaves the country hungering for imported bauxite.

Mine developments are being undertaken by both alumina refinery operators—looking to secure upstream resources—as well as third parties looking to take advantage of the ever-rising demand. Chinese alumina refineries, by necessity, are having to undertake these developments offshore. While a processing plant can be built anywhere, the locations of raw materials are fixed—high quality bauxite that do not require expensive processing are not in China.

It is likely China will look to develop refineries near bauxite resources outside of the country, such as those in Guinea—which are currently limited to the small 640ktpa Fria refinery operated by Rusal. Despite the associated risks with developments in West Africa, Chinese companies could develop local capacity to increase the contained value of shipments.

It is understood that SMB is already constructing a refinery associated with its Guinea resources, though development has been slow. Though the country is rich in bauxite resources, there remains the need to set up a supply chain for caustic soda and energy.  

Guinea

Home to the largest estimated reserves of bauxite, Guinea has seen a rapid rise to become the largest producer and exporter of the material. The country has a long history, producing ~20Mtpa largely from the CBG and Rusal mines and supplying refineries in Europe. However, since the arrival of China-backed SMB in 2015 and development of its mines around Boke, exports of bauxite from the country have surged with the new volumes headed in the one direction.

Looking to secure supplies, Chinese companies have been particularly active in developing the vast resources of quality bauxite available. SMB has been most active—supplying Hongqiao Group’s vast refining capacity in China—but Chalco also started operation of a 12Mtpa mine in 2020.

Additionally, a number of Chinese companies currently have mining licenses allocated to them. Guinea is trying to encourage development of refining capacity in the country, attaching (weak) conditions to the granting of mining licences, though any development is likely to be met by additional bauxite supply, without eating into export volumes.

Export focused developments such as Bel-Air are also largely targeting the China market. Activity has not been limited to Chinese companies; Emirates Global Aluminium (EGA) started its 12Mtpa GAC project in the country. In February 2023, the Koumbia bauxite project was launched. Elsewhere in West Africa there are bauxite projects in Sierra Leone, Cameroon and Ghana.

Australia

Built on the back of its significant alumina refining capacity and large bauxite reserves, Australia has been the largest producer and was also the largest exporter of the mineral before the rise of Guinea. Typically, a third of production would be exported while the remainder is converted into alumina. Seaborne production predominately come from Rio Tinto’s Weipa deposits in Queensland—now including the Amrun mine.

Alcoa trialled a 5-year bauxite plan ending in 2021, in which the company exported an additional 2.5Mt of bauxite. The export plan was dropped in favour of maintaining its current output to focus on value-adding to the bauxite operations.