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Xinjiang Zhonghe plans to invest RMB 5.7 billion in an overseas alumina project.
2019-02-14
On the evening of December 2, Xinjiang Zhonghe announced that it plans to invest in and develop a 1-million-ton-per-year alumina project in Guinea, to be implemented by a project company established in Guinea. The total investment for the project is US$831 million, equivalent to approximately RMB 5.7 billion. Xinjiang Zhonghe stated that, in recent years, aluminum oxide prices have experienced significant volatility due to domestic supply-side structural reforms and the international environment—particularly pronounced in imported alumina—placing substantial pressure on the company’s supply-chain security and profitability. Developing the Guinean alumina project will help secure the company’s demand for high-quality alumina, bolster its profitability, and enhance its risk resilience.
According to the project plan, Xinjiang Zhonghe intends to establish a wholly owned subsidiary in Hong Kong. The Hong Kong entity, together with the proposed strategic investor, will jointly invest to set up a joint venture in Dubai, with Xinjiang Zhonghe holding an equity stake of no less than 51% in the joint venture. Subsequently, the Dubai‑based joint venture will establish a company in Guinea, which will undertake the aforementioned Guinean project. Under Xinjiang Zhonghe’s assessment, the Guinean project has a construction period of 2.5 years and a ramp-up phase of 2 years; it is expected to reach 95% capacity in the year of commissioning and achieve full capacity in the second year. Upon completion and operation, the project is projected to generate average annual sales revenue of RMB 2.59 billion and average annual net profit of RMB 473 million.
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