China Hongqiao to buy African bauxite deposits for USD 120 million
Published By : 04 Jun 2014 | Published By : QYRESEARCH
According to aastocks.com, China’s largest, non-state aluminum producer China Hongqiao Group Limited (1378) has agreed on buying a company in Africa for USD 120 million that produces bauxite deposits.
Indonesia is the largest economy in Southeast Asia. In January, it banned exports of any unprocessed ore. This led companies such as China Hongqiao to seek bauxite from other parts of the world. Hongqiao in China is one of the lowest ranking cost smelters and it was building towards an output after its rival companies.
Previously, the head of corporate finance, Christine Wong said that they were looking for resources in Africa and may make some concrete progress in the coming months. Wong also stated that they must focus on a controlling stake to ensure that they have an offtake agreement for over 20 to 30 years.
Aluminum is the second-most used metal after steel, because of its versatility. It is used in transportation, commerce, and other industries. Aluminum is extracted out of bauxite, which makes bauxite valuable.
Winning Logistics Co. from Africa and China Hongqiao signed an accord to buy bauxite deposits from a company in Guniea. The resource base for which is reported at 2.2 billion tonnes. This target company holds the right to produce and develop bauxite for the 25 years from a deposit
China Hongqiao will have a 90% stake in the target company while Winning Logistics Co. will hold the rest.
Christine Wong recently said that Hongqiao plans on increasing the production of aluminum by 30% to almost 3 million tons this year. Wong also said that they are planning to buy a bauxite mine in Africa.