The People’s Republic of China’s Henan Xiangjiang Wanji Aluminum Co., Ltd. has shut down its alumina refinery in Wanji on account of the potential of a dangerous red mud landslide. According to CRU, the timetable for reopening the facility is not known at this time.
A source from within the country indicates that the southwest corner of its red-mud dam body is unsound, threatening a red-mud slide. The Xinan town government, which oversees the town within which the refinery is located, received a report of same and dispatched a working group to the area shortly thereafter. The government required the refinery to cease discharging red mud at once for safety reasons. At the time of the report, over three hundred residents had been evacuated to a safe location, and ten dozen police officers have been stationed nearby.
CRU consultant Jackie Wang opines that the 1.4 million-metric-ton-per-annum refinery will require between three and six months to resume operations. On a macro level, many aluminium refineries in the province have been affected recently by government environmental inspections. For instance, the 2-million-metric-ton-per-annum Sanmenxia Kaiman alumina refinery is running at half capacity at present until it takes mandated action on converting its coal-fired power plant to natural gas.
Wang goes on to explain that other raw materials (like lime and caustic soda) may become scarce in the province for similar reasons. In addition, some of Henan’s bauxite mines have been administratively closed as well due to lack of permits or failure to complete proper paperwork with the government, which may cause other refineries in Henan to curtail production partially or even entirely.
CRU forecasts the price per metric ton of alumina to remain in a range between US$257 and US$261, but the 2.4 million-metric-ton-per-annum drop in supply described above may lead to a corresponding rise in local prices.