The Chinese government on Monday put the brakes on the feverish
expansion of electrolytic aluminum production by stopping approval
of any projects to expand or construct electrolytic aluminum
plants.
An official from the State Development and Reform Commission,
which oversees the country's economic restructuring, said the
government would not allow new electrolytic aluminum projects in
any form to be started.
Proposed foreign-funded projects would also undergo strict
scrutiny according to due procedures, the official said.
Ma Kai, minister in charge of the commission, total local
reporters that bank loans and funds raised from the security market
could not be used for the construction of electrolytic aluminum
plants without government approval.
China, already the top electrolytic aluminum producer in the
world with an annual capacity of 5.1 million tons, is likely to
double the capacity in a few years if the projects under
construction or to be launched are taken into account. At that
time, the output will far exceed market demand.
However, as the cost of electricity climbed and prices of raw
materials soared, most of the electrolytic aluminum plants were
expected to lose money in the next few years, according to the
commission.
The commission encourages regrouping of the existing
electrolytic aluminum companies by means of merger or acquisition
so the sector can improve efficiency and international
competitiveness.
(Xinhua News Agency August 19, 2003)