JPM | A new refinery in Aus, Chalco site visit & China overproduction, Raising 2026 GRMs to $30/bbl, RIO 1H Preview, LNG transits at a standstill, first takes in Aus/India

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JPM | A new refinery in Aus, Chalco site visit & China overproduction, Raising 2026 GRMs to $30/bbl, RIO 1H Preview, LNG transits at a standstill, first takes in Aus/India

capacity records, while the latter damages pot

stability, power consumption and pot life. Enforcement should increasingly rely on production, power consumption and

emissions data, which is not difficult to implement.

• Management expects limited risk of ODI tightening. The 200kt Guinea alumina project is advancing through the final

stage of approvals and registrations, according to management. While Decree No. 837 introduces deeper scrutiny of

capital flows and control, Chalco sees limited risk, as securing upstream resources investments and a compliant approach

are broadly consistent with the government’s policy objectives. Overseas priorities remain securing bauxite resources and

developing alumina/smelting capacity in renewable-power advantaged regions. We believe SOEs with objectives similarly

aligned are relatively well positioned.

• Baotou Aluminum demonstrates competitive power costs. We visited Baotou Aluminum’s Factory No.3. Baotou

Aluminum has 1.46mt of smelting capacity, ~18-19% of Chalco’s capacity. Management indicated total power

consumption of ~21TWh, of which clean energy and externally purchased electricity account for ~30% each. Blended

electricity cost is below Rmb0.40/kWh. Long-term, Chalco plans to expand recycled aluminum from ~400kt to ~1mt;

progress will hinge on addressing fragmented scrap supply and project economics. To improve shareholder returns, the

major shareholder announced a proposal to increase its stake (20 July), and management expects the FY26 payout ratio to

exceed in 2025 (36.55%).