China’s East Hope Group to Invest US$1.5 bn in Inner Mongolia

China’s East Hope Group to Invest US$1.5 bn in Inner Mongolia

According to local reports last week, Shanghai’s East Hope Group is to begin a “major investment project” in the Inner Mongolian city of Baotou. East Hope indicated that the investment would be in the neighborhood of US$1.5 billion.

The Inner Mongolia Autonomous Region Party Committee, Party Secretary Wang Jun, city leaders Du Xuejun, Zhang Shiming, Li Chun-jen, government Secretary-General Guo Fu Yan attended the ceremony. Mayor Du Xuejun and East Hope Group chairman Liu Yongxing signed the investment cooperation agreement.

East Hope Group already has several other business operations in Inner Mongolia, including an 880,000-metric-tons-per-annum aluminium smelter in Baotou, which is running at full capacity at present.

The announcement comes on the heels of an anonymous source reported by Platts as saying that an expansion project in neighboring Xinjiang province has been delayed yet again. East Hope planned to increase the capacity of the 800,000-metric-tons-per-annum to over 1.2 million metric tons per annum in mid-2015. Prevailing market prices forced the expansion first to the end of 2015, and now, according to the source, the expansion has been delayed to the latter half of 2016.

“We’re actually operating at around 900,000 mt/year currently, but can probably reach 1.2 million mt/year nearer year end […] though that still depends on market conditions this year,” the source is quoted as saying. “There are no further plans to expand for now.”

The Xinjiang smelter, opened in 2012, was first expanded to a nameplate capacity of 400,000 metric tons per annum by the end of that year. It was again expanded to 600,000 metric tons per annum the next year, and 800,000 metric tons per annum the year after. The final design capacity of the plant is between 2.4 million metric tons and 3.2 million metric tons per annum.

Both the Inner Mongolia and Xinjiang smelters refine alumina from East Hope’s alumina refinery in Henan. The Baotou smelter also smelts alumina from other domestic suppliers.