China gains in aluminum field

Posted by tjdetai on July 7th, 2015

China uses clumsy and expensive methods to extract the raw material for aluminum in underground mines, Alcoa CEO Klaus Kleinfeld said Wednesday.

Yet the Asian nation manages to produce about 40 percent of the world's aluminum and plans to produce more by mining from the surface, a more efficient method.

"The question is, are they serious about it, or is it just talk," Kleinfeld told an audience of 80 people at a World Affairs Council of Pittsburgh program at the Duquesne Club, Downtown.

If China, a nation of about 1.3 billion people, is serious, it will change the aluminum industry, said Kleinfeld, who became CEO of Alcoa, the nation's largest aluminum producer, in 2008.

Kleinfeld, a regular visitor to China, said it also consumes about 40 percent of the world's aluminum.

Aluminum prices have declined to levels that should affect output, particularly in China, an analyst at Dalman Rose & Co. said this week. Alcoa reports third-quarter results on Tuesday.

Kleinfeld said China's method of extracting bauxite, aluminum's raw material, is through underground mining, which is an unsustainable method.

China's new five-year plan includes mining bauxite from the surface, then reclaiming the land, which is a more efficient and sustainable method, he said. The nation, whose economic output has been growing at about 9 percent a year, is planning for an average 7 percent growth track over five years, which will incorporate similar sustainable practices, he said.

He said the nation is able to maintain its high economic growth rate because of its massive investments in infrastructure, increased urbanization and rapidly growing middle class.

Alcoa operates in 31 countries at more than 200 locations, including China, where it has invested more than 0 million in that nation's aluminum industry. More than 1,000 of Alcoa's 59,000 employees work at a half-dozen facilities in China. The company employs 1,930 in Western Pennsylvania.

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