Bauxite, alumina, aluminum and its products form a complex value chain with multiple influences and feedback relationships, marked by economical, technological, geographical and other specifics. Being labor-, technology-, energy- and finance-intensive, this value chain is dependent from availability of resources, skilled labor force, macroeconomic conditions, national regulation of the related industries, country-specific trade tariffs, exports-imports balances, technological advances, ecological factors and environmental policy. Naturally occurring bauxite ores act as a source for smelter grade alumina, which in turn acts as a material employed in aluminum metallurgy (smelter-grade alumina), industrial ceramics (calcined alumina), and chemical processing. One new emerging area for calcined bauxite is in proppant manufacture for use in shale-gas production, which has significantly increased in volume over the recent time.
Bauxite reserves are primarily spread across Africa, Oceania, South America, the Caribbean and Asia.
Bauxite: structure of the world reserves (2014)
Australia, China, and Brazil were the major countries in bauxite mine production in 2014. Global bauxite output volume in 2014 decreased by 17.3% on the previous year. The decrease was largely driven by a decision of the Indonesian government to impose restrictions on exports of unprocessed bauxite ores in early 2014 in an effort to boost development of local smelters. This decision resulted in the fall of Indonesia’s bauxite exports from 55.6 mln. tons in 2013 to 2.1 mln. tons. This step is currently being reviewed by the local government to allow a resumption of bauxite exports. Thus, the geographical factor in the bauxite, alumina and aluminum sectors will play an important role, increasing inequalities and risks, but also opening up possibilities and creating competitive edges.
Rusal and Alcoa World Alumina and Chemicals (AWAC) are the largest producers of bauxite and alumina in the world. Total alumina production reached 108.5 mln. tons in 2014, up 1.9% on 2013. Aluminum producers are hit by low base-metal prices and need to diversify their business by paying more attention to high-tech products, service-dominant logic, building relationships and production of new materials. The regional factor again will loom large for various national producers, affected by lack of credits, sanctions and poor macroeconomic conditions.
More information on the bauxite and alumina market can be found in the insightful research report “Bauxite and Aluminum: 2016 World Market Review and Forecast”.