The announcement follows hot on the heels of Indonesia's decision earlier this year to curb exports of bauxite. As a result, Chinese bauxite imports fell by 55% to 1.05Mt. Ore imports fell 30% to 2.14Mt. In 2011, Indonesia was responsible for 80% of China's total bauxite imports.

Chalco now plans to develop a large bauxite mine in Indonesia with PT Indonusa Dwitama under a joint venture agreement signed in August.

Meanwhile, privately-owned aluminium producer Bosai Minerals Group has similar plans and has hinted that it might invest US$1bn in a 2Mt capacity alumina facility in Indonesia. A lot depends on whether or not Indonesia changes it export policy. While the aforementioned export ban is still in place, Indonesia's Supreme Court has annulled some elements of the Indonesian government's Decree No 7, including Article 21, which bans mineral ore exports.

Aluminium output in China stood at 1.75Mt in August 2012 and was up 11% to 16.5Mt for the period January to October when compared to the same period the previous year. For the same nine-month period of 2012, demand grew 5.8% to 14.4Mt.