With Indonesia already imposing export duty of around 20% on bauxite and Jakarta planning a ban on bauxite imports from 2014, importing countries, like China, are beginning to feel the heat.
China is increasingly dependent upon imported bauxite to feed its alumina refineries – which now account for 37% of global capacity, according to Business Standard. And that figure is up by 11% since 2004.
Currently, China is importing 45Mt of bauxite but now that Indonesia's export duty is beginning to bite, Chalco, China's biggest producer of aluminium, has announced cutbacks in alumina production and other producers in the country are planning to restrict production by 10%.
China's alumina refinery capacity is roughly 40Mt. "The country is left with no option other than to go for 'very intensive mining of bauxite' and resort to large imports of the mineral at the same time," says Business Standard's Kunal Bose.
In 2011, China produced over 34Mt of alumina, up from 29Mt in 2010.
China is acquiring bauxite deposits in Australia, Canada and Peru and is taking an interest in Vietnam where bauxite deposits are thought to be in the region of 11bn tonnes.