With the world becoming increasingly environmentally conscious, aluminium has seen a meteoric rise in demand due to its pivotal role in the green transition. As a result, bauxite, the primary raw material employed in aluminium production, has also experienced a similar exponential growth in demand. According to Business Research Insights, the global alumina and bauxite market is projected to grow at a CAGR of 5.11% until 2032, driven largely by China, the world’s largest importer of bauxite.
China’s demand for aluminum is primarily driven by expanding sectors such as infrastructure and, more recently, its pivot toward green technologies like solar panels and electric vehicles. Initially, much of China’s bauxite demand was met through domestic mining. However, stricter environmental and mining safety regulations in the Shanxi and Henan provinces have significantly curtailed domestic bauxite production. As a result, China has increasingly turned to imports to fill the gap, and this trend shows no signs of slowing. In 2024, China’s bauxite imports rose 12.6% year-on-year to 159 million tons, with customs data for January-February 2025 indicating a further 25.6% year-on-year increase to 30.6 million tons.
Guinea has supplied the lion’s share of China’s bauxite imports, accounting for about 70% in 2024. Their supply is expected to increase further: In 2024, Guinea’s Societe Miniere de Boke (CMB) announced plans to invest up to $1 billion over five years to upgrade its river terminals and purchase vessels, projecting an increase of 10 million tons per annum (mtpa) in exports.
However, there are cracks in Guinea’s stability as a supplier. Seasonally, Guinea experiences a slight downturn in exports from July to November due to monsoon weather, creating an opportunity for other countries like Australia to capitalize on the supply gap. Additionally, Guinea faces political and social instability. For example, Guinea’s trade unions held a nationwide strike in February 2024, and in October 2024, bauxite exports from Guinea Alumina Corporation (GAC), a subsidiary of Emirates Global Aluminium (EGA), were suspended. Speculation suggested this suspension was linked to government pressure on EGA to accelerate the construction of alumina refining capacity. These are just a few examples of the broader instability in recent years.
Guinea’s volatility presents an opportunity for countries like Australia, Indonesia, and Vietnam to advance their own bauxite mining sectors. While their trade volumes remain smaller, exploration efforts are underway to boost production. A notable example is Glencore’s Aurukun Bauxite Project, which is currently in its assessment phase and could potentially extract up to 15 mtpa. Similarly, Vietnam’s Dak Nong Province is developing four new bauxite mining and processing facilities, which have already attracted a combined investment of US$8 billion.
These developments have significant implications for both the Capesize and Panamax markets, as they are the primary movers of bauxite. The Capesize market, in particular, has benefitted from the strong pace of Guinea’s bauxite exports. With the Capesize segment expecting the lowest fleet growth among the vessel sizes, strong exports from Guinea could also slow scrapping activity in the Capesize segment should vessel supply be insufficient. In 2024, more than 30% of Guinea’s bauxite sailings were performed on vessels over 15 years old, given Guinea’s lack of regulation on vessel age.