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The return of Malaysia does not shake the bauxite market

Malaysia revives bauxite exports after four years of embargo. But the Asian country is not likely to dethrone the new champions of this ingredient of aluminum.

The restart of three bauxite mines is under consideration in southeastern Malaysia and is the first since January 1, 2016. At the time, the Malaysian authorities decided to stop all exports in order to better regulate mining activity, which has contaminated the waters. The Asian country stops exporting this key ingredient of aluminum, while Malaysia was China's largest supplier.

Guinea replaced Malaysia

Since then, other mining countries have replaced Malaysia. Australia and Guinea rushed into the breach. The West African country has become the world's third largest producer and the largest supplier to China, its exports exceeded last August 3.6 million tonnes, as much as Malaysia in December 2015 - and still Guinean expeditions down because of the rains.

Mining projects have proliferated in Guinea, in the regions of Boffa and Boké. The new operators are Chinese, but also Emirati. This is to supply China, whose own bauxite production has peaked last year and is declining this year. The new alumina and aluminum plants in the United Arab Emirates and India, new sources of growth for this industry, must also be supplied.

Chinese imports up sharply in 2019

The return of Malaysia does not worry too much the other suppliers. Malaysian exports will be subject to strict environmental impact studies and will be capped at 600,000 tonnes per month from Pahang State, the only one to date.

This restart will therefore have little impact on global bauxite trade, which is dynamic despite the stagnation of the aluminum industry. Chinese imports of bauxite continue to grow, + 30% over the first eight months of 2019, after a growth of 21% last year. This keeps the price of bauxite high, around $ 50 a tonne in Chinese ports.