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China Hongqiao kicks off aluminium production in Yunnan

BEIJING/SHANGHAI (Reuters) - The world's top private-sector aluminium producer China Hongqiao Group Ltd 1378.HK has started first phase production at a greener aluminium plant in the southwestern province of Yunnan, cutting its reliance on coal-fired power, a Hongqiao affiliate said on Thursday.

Hongqiao’s smelting capacity is currently located in the city of Binzhou in Shandong and relies on coal-fired power for the electricity-intensive smelting process. The move to Yunnan allows it to swap coal for cleaner hydropower.

The project, led by Shandong Weiqiao Pioneering Group, is located at Wenshan prefecture and has an annual capacity of 2.03 million tonnes, the company said in a statement.

Hongqiao aims to move about one-third of its aluminium capacity out of Shandong province to the hydropower-rich Yunnan province amid China’s environmental curbs.

The first phase of the project put into production on Thursday has capacity of one million tonnes per year, according to Hongqiao.

“Currently, the company does not have an exact timeline for the launch of phase two, but will complete by 2025”, it told Reuters.

The whole project involves total investment at 40 billion yuan ($5.91 billion) and is expected to eventually bring in sales of 100 billion yuan per year, according to China’s official Xinhua news agency.

Ge Honglin, head of the China Nonferrous Metals Industry Association, said the project would help enhance China’s clean production level in the aluminium industry as it strives to make “world-class” high-end aluminium products.

China, the world’s top aluminium producer, set a record monthly high production of 3.17 million tonnes in August.

($1 = 6.7664 Chinese yuan renminbi)

Reporting by Min Zhang in Beijing and Emily Chow in Shanghai;Editing by Elaine Hardcastle