China's import origins of bauxite are too concentrated, posing a potential threat to the nation's aluminum industry, the Customs said yesterday.

About 99.5 percent of China's imports of bauxite, which is refined to alumina and then smelted to produce aluminum, now come from Indonesia, India and Australia, it said.

"If these supply channels are disrupted, it will create potential threats to the security and sustainable development of the domestic alumina and aluminum industries," the Customs said on its Website.

It also said that the extraction of bauxite domestically was somewhat unchecked and overabundant, with its rate of recovery only half of the international level of 80 percent and proven deposits only enough for around 10 years under current mining volume.

The government should further control the inauguration of new plants and speed up eliminating obsolete capacities, and encourage technical upgrades in companies to boost efficiency, it said.

Qualified companies should also go overseas for closer control of mining resources, the Beijing-based Customs said.

In the first seven months, China imported 16.1 million tons of bauxite, up 29.3 percent year-on-year. Due to a widening supply gap, its reliance on imports for bauxite is set to reach 47.3 percent this year from 9.4 percent in 2005, according to industry estimates.

Domestic alumina output is expected to rise 32.5 percent to 27.69 million tons this year, under a capacity of 33 million tons.

Meanwhile, the president of Chalco said the company was planning to maintain output of primary aluminum despite the lower prices which may force smaller rivals to cut production.

Smaller Chinese smelters, which operate at higher costs, may have big capacity cuts in the face of low metal prices and weakening demand, Luo Jianchuan said at an industry conference in Chongqing yesterday.

But Chalco is not considering such cuts as the government is working on measures to sustain demand, he said. Chalco, or Aluminum Corp of China Ltd, is the domestic industry leader.

(Shanghai Daily September 23, 2008)