A global rush for bauxite, the primary ore used to produce aluminum, is intensifying, driven by both Chinese and U.S. companies looking to secure access to this critical resource.
In Suriname, a country in South America, Chinalco, a state-owned Chinese mining and metals company, has claimed neglected bauxite deposits in the western region. Meanwhile, in Australia, Alcoa, a major U.S. aluminum producer, plans to restart bauxite mining operations in a region that was abandoned a decade ago.
This renewed interest in bauxite mining is largely driven by a tightening supply of bauxite and alumina, the intermediate material used to produce aluminum. Cutbacks in mining operations in Guinea, the world’s largest bauxite exporter, along with disruptions in Australia, Brazil and China, have led to significant price increases. Over the past two years, the price of bauxite from Guinea has surged by 50%, reaching $75 per ton, while Australian bauxite prices have risen by 60% to $55 per ton. Alumina prices have seen even steeper hikes, climbing by 140% in the past year due to supply shortages and refinery closures in Australia.
The price increases began in late 2022, when Alcoa shut down its 50-year-old alumina refinery in Kwinana, Australia. This was followed by the temporary closure of Rio Tinto’s massive alumina refinery near Gladstone in Queensland. These disruptions have further tightened the market for alumina, contributing to higher aluminum prices. As a result, some aluminum smelters, including Russia’s largest producer, Rusal, have been forced to scale back production, reducing their annual output target by 250,000 tons.
The global bauxite and aluminum industries are now navigating an environment of increased prices and supply challenges, with major producers and consumers scrambling to secure resources and maintain production levels.
