EGA to supply bauxite from its Guinea mine to China's Xinfa

Companies sign five-year agreement with shipments to begin in 2020

Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas, signed an agreement with China's Xinfa to supply bauxite from its Guinea mine to the Chinese Show more

Emirates Global Aluminium, the UAE’s biggest industrial company outside the oil and gas sector, signed an agreement to supply bauxite from its mine in Guinea to one of China's top aluminium producers Xinfa.

Under the five-year agreement, EGA will supply millions of tonnes of bauxite each year from its Guinea Alumina Corporation mine to the Chinese company with the first shipment scheduled in January 2020, EGA said on Monday. Bauxite is the raw material refined into alumina which is used to make aluminium.

"GAC is a new global source of high quality bauxite, responsibly produced and with cost-effective shipping using the world’s largest bulk cargo vessels," said Abdulla Kalban, managing director and chief executive of EGA. "The strategy we are successfully implementing is to have a diversified customer base for GAC bauxite in major markets including China and India."

EGA invested $1.4 billion (Dh5.14bn) in the bauxite mining project in the West African country as part of its strategy to control all parts of the value chain, reduce costs and secure raw materials for its aluminium production. The company's mining project and its Al Taweelah alumina refinery, where EGA began production in April, are intended to create new revenue streams for the company.

"As a major imported bauxite consumer in China, Xinfa’s agreement with EGA will enhance our stable long-term bauxite supply," said Zhang Gang, chairman of Xinfa Group. "We are looking forward to achieving strategic win-win success through both Xinfa and EGA’s commitment.”

In July, EGA signed a long-term agreement with Vedanta for bauxite supplies from GAC. EGA’s unit GAC began bauxite exports in August.

EGA’s aluminium is primarily used in the construction, automotive, packaging, aerospace and electronics industries. In 2018, the company produced a record 2.6 million tonnes of cast metal and made a profit of Dh1.2bn on revenue of Dh23.5bn.

EGA has more than 350 customers in about 60 countries, with the majority of its sales going to South-East Asia, followed by the US and Europe. The domestic market in the UAE accounts for about 10 per cent of EGA's sales.