1、Experience in Chinese Alumina Refinery Construction Overseas and Related Problems,Northeastern University Engineering & Research Institute Co., Ltd18 May, 2018,2. Status quo of overseas construction,1. Foreword2. Investment of overseas alumina refinery 2.1 Company to build plant in Indonesia 2.2 Com
2、pany to built plant in Guinea 3. Experience in overseas construction 3.1 Functional orientation 3.2 Thorough investigations before investing 3.3 Site selection 3.4 Design standard 3.5 Attentions in design 3.6 Attentions in construction,3.7 Vocational training 3.8 Construction period 4. Attentions in
3、 overseas construction 4.1 Investment environment 4.2 Cultural difference 4.3 Infrastructure 4.4 A close relationship with local residents 4.5 Social responsibilities to take on 5. Summary,1. Foreword,Over the last decade, Chinas aluminum industry has seen fast development with alumina production ca
4、pacity in a constant state of rapid growth. From 2012 to 2015, the compounded annual growth rate was 9.45%. By 2017, the alumina production capacity in China has reached 81.25 million tons, accounting for 54% of the global production capacity.With the rapid development of alumina industry, Chinas de
5、mand for bauxite has also increased year by year. The bauxite reserves in China is only 980 million tons. In view of the scarce reserves, many bauxite mining companies rely on imported bauxite with the rate of up to 44.5%.In 2014, the Indonesian government implemented a ban on export of mineral reso
6、urces such as bauxite. The implementation of this policy exerted a relatively huge impact on Chinas alumina production. As a result, many Chinese companies began to build refineries and exploit bauxite resources in overseas market, ushering into a new age of development.,2. Investment of overseas al
7、umina refinery construction,Over a decade ago, some Chinese companies have already begun to purchase bauxite and build alumina plants abroad, and visited the main production areas for study. Summarizing the work overseas in recent years, it is not hard to see that the existing built and proposed alu
8、mina refineries are mainly located in the following countries.,2.1 Company to build plant in Indonesia(1) China Hongqiao Group Hongfa Weili Indonesia 2Mtpa alumina project(2) Shandong Nanshan Aluminum Indonesia Bintan Nanshan Industrial Park 1Mtpa alumina project(3) CHALCO Hong Kong 1Mtpa alumina pr
9、oject (collaboration with NALUM and ANTAM),2. Status quo of overseas construction,2.2 Company to build plant in Guinea (1) CHICO and China Henan International Mining Development Guinea Co., Ltd to built bauxite development project(2) CPI International Minerals other Chinese companies to participate
10、inoverseas alumina refinery design project.,3. Experience in overseas construction,In the process of Chinese enterprises entering into overseas market for building plants, NEUI participated in the entire process, including project inspection, site selection, design, and construction of some of the p
11、rojects. Among which, China Hongfa Weili Alumina Co., Ltd.s alumina production line designed by NEUI is Chinas first alumina production line built and put into operation overseas. The following table shows the overseas alumina plant projects that NEUI has participated in over recent years.,Overseas
12、alumina projects NEUI participated in over recent decade,3. Experience in overseas construction,Overseas alumina projects NEUI participated in over recent decade (continued table 1),3. Experience in overseas construction,Overseas alumina projects NEUI participated in over recent decade (continued ta
13、ble 2),3. Experience in overseas construction,Overseas alumina projects NEUI participated in over recent decade (continued table 3),3. Experience in overseas construction,3.1 Functional orientation,Most enterprises step into overseas market for sourcing bauxite resources which is scarce in China, an
14、d for maintaining the stability of their own sources of raw materials, and at the same time making full use of the resource advantages. These companies products are mainly targeted for Chinese market.It can only be guaranteed that enterprises can reasonably choose the investment method and productio
15、n scale when they have a clear understanding of the functional orientation and investment motives of entering the overseas market,3. Experience in overseas construction,3.2 Thorough investigations before investing,To build an alumina plant in a foreign country, the first issue to be considered is th
16、at the destinations market conditions are different from those in China. So a sufficient market survey is very necessary to cover a variety of themes such as local political, economic, cultural, foreign policy, legal, market demand and potentials, labor costs, resource advantages and so on, and spot
17、 inspections are also needed. In formulating construction feasibility study, investors should value the issue of plant site, should consider factors such as changes in relevant policies of the investment destination country, its diplomatic and economic relations with China, odds of force majeure eve
18、nts, as well as risks brought about by changing market conditions in the international market. Top priorities to be learned about destination countries are as follows: (1) Geographic, political and cultural background;(2) Infrastructure; (3) Production costs in that country;(4) Related laws and poli
19、cies;(5) Other noteworthy issues.,3. Experience in overseas construction,3.3 Site selection,In choosing plant site, locality is the first-priority issue to be considered. Investors should evaluate potential sites in terms of natural resources, transportation, government economic and industrial devel
20、opment plans, policy, human resources, land resources, raw materials and influences of the locality. Our previous overseas investments had a similarity, which is that potential sites commonly suffer from weak infrastructure, lacking basic water and electricity supply and transportation conditions, a
21、nd investors therefore have to build matching devices. To do this, investors need to set up a technical team consisting of several fields to complete the whole process. Investors should pay attention not only to individual parts of the construction pricesss but also to cross-field cooperation so as
22、to make sure that every sub-team understands their own responsibilities. Its quite difficult to collect information on infrastructure in destination countries, even the most fundamental data such as on weather, topographic and hydrology. So Chinese project workers have to depend upon themselves to c
23、ollect such information, even by conducting field surveys themselves.,3. Experience in overseas construction,3.4 Design standard,There are usually two varieties of overseas alumina plants built by Chinese enterprises. One is those invested by foreign countries (India and Greece) and designed jointly
24、 by both sides (Jamaica). For those plants, construction criteria are western-type on the whole but part are Chinese as China has advantages in terms of technique and equipment. Another variety are plants invested by Chinese enterprises. But owing to historical reasons, the destination countries usu
25、ally adopt western criteria while Chinese designing institutes are more used to GB designing code, not so aware of systems such as ASTM/ANSI, IEC, DIN, NFPA and ACI/AISC. So Chinese investors should try to persuade their overseas partners to accept Chinese criteria, convincing them of our advantages
26、 in techniques and equipment as well as that Chinas environmental protection criteria are higher than their foreign counterparts. By doing this, we can highlight Chinas advantages in production technique, energy saving and costs of investment. Generally speaking, we adopt compulsory criteria of dest
27、ination countries (including environmental protection, work safety and fire-proof), and use Chinese criteria for other fields during the construction process.,3. Experience in overseas construction,3.5 Attentions in design,Indonesia and Guinea are both located in tropical or subtropical regions and
28、have similar weather characteristics. For example, the year has only two seasons, rain and dry seasons. Therefore in designing Indonesia- or Guinea-based plants, attention should be paid to local weather. For example, switching rooms must have excellent drainage system and flood/moisture proof funct
29、ions, inside equipment should have good ventilating and cooling systems, all electric equipment should have good water-proof devices, and the whole building should have good ventilating and rain-screening designs. As most overseas plants are built in industrially underdeveloped regions, the majority
30、 of equipment or spare parts have to be purchased from China or western countries, and designers should take into consideration the number of spare parts and purchase cycles, as well as universality and inter-replaceability of spare parts, so that the number of spare parts and their varieties can ho
31、ld at a low level when the plants go into operation. In addition, designers should pay attention to accessibility of road and parking sites for large-size equipment in case of maintenance.,3. Experience in overseas construction,3.5 Attentions in design,Water supply is another issue to be considered.
32、 Spot inspections and historical data both show that most rivers in tropical and sub-tropical regions do not meet up with production requirements for alumina plants. During dry seasons, such rivers are subject to inwelling and therefore have quite high contents of chloride ion and minerals; while du
33、ring rain seasons, they usually contain large-quantity forest humus which are flushed into by rains and therefore are rich in organic contents, which are unsuitable to be used directly in production process. So investors have to consider putting into place water purifying devices. Meanwhile, as such
34、 regions usually suffer from unbalanced rainfalls, designers should also pay attention to water supply in dry seasons. Geological conditions of plant sites and their nearby red-mud regions will have great influences upon infrastructure investment. So once potential plant sites have been decided, pro
35、ject teams should go to the sites to make on-spot checks so as to avoid unnecessary investment to be added later. It is learned that both Indonesia and Guinea are seller markets in terms of cement and steel products and local market volumes cant meet up with what is needed in building an alumina pla
36、nt there, and so local prices for construction raw materials are relatively high. Generally speaking, if investment for building an alumina plant in such a country is twice higher than that in China, its not surprising.,3. Experience in overseas construction,3.6 Attentions in construction,The factor
37、 of season should be considered in engineering construction. For example, the rainy season in Indonesia and Guinea can last for 3-5 months, which influences civil engineering and installation greatly and leaves a relatively short period for construction. Therefore, detailed budget and consideration
38、should be made in construction organization and plans: priority project should be subdivided, outdoors projects be largely arranged construction in the dry season and indoors projects be properly established in the rainy season. Conditions of carriage determine the convenience of transporting raw ma
39、terials and control in transportation costs. In Guinea, bauxite mines are far away from plants and marine outfalls, thus companies should consider construction from a long-term point of view as they will face high costs and strict environmental protection and dust fall requirements if they transport
40、 by road and long-period of construction and large quantity of investment by railway. The roads in above tropic and sub-tropic zones are in terrible conditions, which are basically built by soil with low hardenability and are usually cut off limited by heavy rain in the rainy season. Among 352km of
41、coastline of Guinea, only several ports can be used for establishing deep-water ports to export bauxite and alumina with a large sum of investment. All of these are the facts that companies should pay attention to.,3. Experience in overseas construction,3.7 Vocational training,According to research
42、and public data, employees in the construction area receive low-level education and lack the knowledge of basic theory. It is difficult to train either local builders during the construction or workers in operation. Therefore, it will take a long period to take training.,All overseas projects may me
43、et various problems in building and operating and companies should take into consideration of governmental factors, laws, customs and national conditions. In Indonesia and Guinea, local people pay high attention to holidays and refuse to work during the period, which might lead to disputes such as s
44、trike and thus cause slow progress of projects during the construction if these factors are ignored. The best way to solve the problem is to set up a department with persons involved with law or with great influence in local places, who can coordinate all the phases of construction, production and o
45、peration.,3.8 Construction period,4. Attentions in overseas construction,4.1 Investment environment,In Indonesia and Guinea, people believe in Muslim and workers should be left time to go to church. Generally, the laws regulate the time for extra work in a week. Therefore, Chinese companies should t
46、ake these into consideration when making working plans.,4.2 Cultural differences,Except visible risks, there remain some unpredictable and inevitable limitations in investing in overseas countries, such as corruption, cultural differences and conflict of interest, which should be anticipated in adva
47、nce and be solved with consistent solutions to avoid the upgrade of irrational requirements.,4.3 Infrastructure,Faced with poor infrastructure and a lack of necessary supporting facilities of alumina plants in Guinea, Chinese companies need to invest and construct themselves. The overall investment
48、will be high due to high costs of unit alumina product.,4. Attentions in overseas construction,4.4 Keep a close relationship with local residents,(1) Know about local cultures, taboos and sensitive problems (2) Realize localization of talents (3) Take part in community activities,(1) Promote local e
49、mployment. Companies should give hiring priority to Guinea employees and sub-contractors on an equal footing to promote local employment.(2) Promote local development. Companies should share with other parties besides meeting self demand when investing, such as building hydropower station, road, bri
50、dge, railway, port and other supporting equipment.,4.5 Undertake necessary social responsibilities,5. Summary,Construction of projects in overseas countries is more difficult than that in China. Only by improving the design and knowing deeply about the specificity of overseas projects, planning, constructing and implementing projects with scientific attitude and learning lessons from every project without copying experience model in China, can we build overseas projects successfully.,
