Beijing told aluminium smelters earlier this week that increased production in the country’s western regions shouldn’t be encouraged despite current industry trends. The central government made the same directive for coke production as well.
The trend in recent months and years has been to transfer and add capacity in Yunnan province in order to take advantage to its abundant hydropower supplies. The Middle Kingdom continues to cut capacity for coke, an ingredient for smelting steel.
On Tuesday the Ministry of Ecology and Environment responded to a document released earlier by the National Development and Reform Commission (NDRC) that named aluminium and coke production as “encouraged industries” for western China.
“Coking and electrolytic aluminium are high-polluting and high-energy consuming industries and they have overcapacity across the country. They should not be included in the catalogue of encouraged industries in the western region.”
The Ministry of Ecology and Environment went on to suggest that the line encouraging aluminium and coke production in western China be deleted from the NDRC document. The ministry also advised against a line in the document supporting the construction of a 3 million metric tons per annum coking project planned for the area.
The area of China considered to be its western portion includes vast swaths of land divided up into several large provinces. Xinjiang, Tibet, Inner Mongolia, and a few other provinces are included in the regional grouping.
Several of China’s main aluminium smelters have moved production out of the eastern province of Shandong, where much of the production is powered by captive coal-fired power plants. In addition to the relatively abundant hydropower in Yunnan, the province also has less stringent environmental protections encumbering industrial producers.