Facts: Industry structure

For aluminium production to be efficient and cost-effective, its production centres must be chosen carefully.

From bauxite mines  to refineries  to smelters , the landscape has shifted dramatically over the last two decades due to energy supply availability.

Traditional operations

Unsurprisingly, bauxite mines are located where there are economically viable deposits of bauxite, predominantly in Australia, Brazil, China, Guinea, India, South America, South-East Asia, and West Africa. Refineries tend to be located close to the mines to minimise transportation costs. While refining can be a significant energy consumer, substantial investments in technology have improved energy efficiency over the last decade, as explained here.

This power generation page covers the significant energy levels required for the reduction process at smelters, with around 70% of electricity coming from suppliers and approximately 30% self-generated . Because smelters tend to be built for operations that can last for decades, they are often located alongside aluminium industry-operated power plants.

Alternatively, the producers negotiate long-term energy deals, which allows them to plan based on stable costs.


Changing times

All industries must adapt to geopolitical, environmental, and societal changes to thrive, and the aluminium industry is no different.

Since the turn of the century, the structure of the primary aluminium industry has shifted. The rising global demand for aluminium has driven this, compounded by increased energy costs – which have risen sharply since 2020. The result? Some areas traditionally associated with aluminium are seeing a reduction in production, while some areas that are newer to aluminium production are seeing significant growth.

According to IAI’s figures, between 2000 and 2022, western and central Europe saw a decline in primary aluminium production from 3.8 million metric tonnes a year to 2.9 million, and North America decreased from 6 million to 3.7 million. However, parts of the world have seen tremendous growth in the same timeframe. China’s production has ramped up significantly, from 2.8 million to 40.4 million. Elsewhere, since the countries of the Gulf Cooperation Council started recording aluminium production in 2010, they have seen a rise from 2.7 million to 6 million.

The result of these changes in production locations has seen global production of aluminium rise from 24.7 million metric tonnes of aluminium in 2000 to 69 million in 2022, with China accounting for around a 57% share.

Deputy CEO

“The aluminium industry is not only growing – due to increasing demand for its products – but is also in a state of structural transition towards new centres of production; driven by access to long term, economically attractive energy, the growth of new markets and availability of raw materials.”