How does China-Brazil MOU impact bauxite market

On April 14, Zheng Shanjie, director of the National Development and Reform Commission of China, and Rocha, the executive vice minister of the Brazilian Ministry of Development, Industry, Trade and Services, signed the “National Development and Reform Commission of the People’s Republic of China and the Federative Republic of Brazil’s Development, Industry, Trade and Memorandum of Understanding of the Ministry of Services on Promoting Industrial Investment and Cooperation. In the next step, the two sides will, in accordance with the consensus reached, promote investment cooperation in the fields of mining, energy, infrastructure and logistics, manufacturing, high technology, and agriculture, and further strengthen the bond of economic cooperation between the two countries.

About Brazil

Brazil, located in the eastern part of South America, is the largest country in South America, with a territory of 8.5149 million square kilometers, accounting for about 46% of the total area of South America. It ranks fifth in the world after Russia, Canada, China and the United States.

Brazil is rich in mineral resources. The reserves of 29 kinds of minerals including niobium, manganese, titanium, bauxite, lead, tin, iron and uranium rank among the top in the world. The proven niobium ore reserves are 4.559 million tons, accounting for more than 90% of the world’s total output; the proven iron ore reserves are 33.3 billion tons, accounting for 9.8% of the world, ranking fifth in the world, and the output ranks second in the world; Its reserves are 15.3 billion barrels, ranking 15th in the world and second in South America (after Venezuela). Since the end of 2007, a number of super-large pre-salt oil and gas fields have been discovered in the coastal areas, with expected reserves of 50 billion to 150 billion barrels, and are expected to enter the list of the world’s top ten oil storage countries; the forest coverage rate is 62%, and the timber reserves are 65.8 billion cubic meters, accounting for 100% of the world’s total. 1/5; rich in water power resources, with 18% of the world’s fresh water, per capita fresh water possession of 29,000 cubic meters, and water power reserves of 143 million kilowatts per year.

In addition to the mineral resources mentioned above, Brazil is also a country rich in bauxite resources. At present, the proven reserves of bauxite in Brazil are 3.80 billion tons, accounting for 11.2% of the world’s total bauxite, ranking third in the world. More than 90% of the bauxite resources are distributed in the states of Pará and Minas Gerais in the northern part of Brazil.

World Bauxite Reserves

Bauxite is mainly used in the aluminum industry to extract metal aluminum, refractory materials, abrasive materials, ceramic raw materials and glass fiber raw materials, etc. It is an important mineral resource with both metal and non-metal applications.

According to the latest data, the proven reserves of bauxite in the world are 32 billion tons, mainly distributed in Guinea, Vietnam, Australia and other places. The reserves in these three regions account for 57% of the total global reserves. The flow of global bauxite trade mainly includes: Indonesia, Australia, Guinea, India to China; Brazil, Jamaica to North America; Guinea to Europe.

China Bauxite Resources

China’s bauxite resources are scarce. After decades of brutal development, the phenomenon of depletion is serious, and there are many impurities in the ore. In 2022, China’s bauxite output will be 67.81 million tons, a year-on-year decrease of 24.5%. In 2022, China’s bauxite import volume will be 125 million tons, a year-on-year increase of 43.8%, and the import dependence will continue to rise.

Although China’s dependence on bauxite imports continues to rise, it mainly relies on imports from Indonesia, Australia and Guinea, and imports less bauxite from Brazil. According to public data, Brazil exported 1.87 million tons of bauxite to China in 2019, with an average CIF price of US$64-72 per ton. Later, due to production problems and shipping costs, exports were suspended until Brazil exported 174,831 tons of bauxite to China again in December 2022. This is the first time Brazil has exported bauxite to China since October 2019.

China-Brazil Cooperation MOU affect China Bauxite Import Market

Compared with suppliers such as Guinea, Indonesia, Malaysia, and Australia, Brazilian mines have no advantage in terms of price and transportation distance, which led to Brazil disappearing from China’s list of bauxite suppliers for a period of time. With the signing of the memorandum of cooperation between China and Brazil, the efficiency of bilateral trade between China and Brazil is expected to be improved. At the same time, based on the background of China’s strong demand for imported ore, the export of Brazilian bauxite to the Chinese market is within reach.

TechSolutions Integrated Bauxite Mining and Refinery Solutions

TechSolutions is a company that specializes in providing engineering design, procurement, and construction services for bauxite mining and refinery projects. The company has years of experience in the industry and has worked on projects in various countries around the world.

TechSolutions provides a range of services for bauxite mining and refinery projects, including feasibility studies, process design, equipment selection, and construction management. The company also offers solutions for the management of tailings, which is a byproduct of the bauxite refining process.

TechSolutions has a team of experts that are knowledgeable about the latest technologies and practices in bauxite mining and refinery. The company is committed to delivering high-quality services that meet the specific needs of each client. TechSolutions works closely with its clients to ensure that their projects are completed on time, within budget, and to the highest standards of quality.

To learn more about our integrated solutions in bauxite mining and refinery, please contact us at service@techsolutions.com.cn or call us at +86 21 6890 6101.