Chinese aluminum producer sells 1.32GW coal power assets for $422m

It joined other smelters in setting its eyes on hydropower.

Aluminum producer China Hongqiao Group is selling off coal-fired power generation assets for $422m (RMB3b) as it prepares to move almost one-third of its capacity to hydropower-rich Yunnan province.

The company has “conditionally” agreed to sell power units with installed capacity of 1.32GW to Shandong Guoxu New Energy, according to a Hong Kong Stock Exchange filing.

Hongqiao, whose current annual aluminum capacity of around 6.5 million tonnes is all in industrial heartland Shandong, has traditionally relied on captured or on-site coal-fired power plants for the energy-intensive aluminum smelting process.

But with China’s sprawling aluminum industry under environmental pressure, Hongqiao has joined other smelters in choosing to set up a production base in Yunnan, Southwest China, to take advantage of cleaner hydropower.

The first phase of its 2 million tonnes per year project in Yunnan is due to start by the end of this year.

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