In Search of Aluminum: China’s Role in the Mekong Region - Policy Brief

This policy brief examines China's strategic pursuit of bauxite resources in the Mekong region, specifically Cambodia, Laos, and Vietnam, to support its growing aluminum industry. It analyzes the economic drivers, the role of Chinese state-owned enterprises, the regulatory challenges in host countries, and the significant environmental and social risks associated with bauxite mining and smelting.

• China has become a dominant force in global metals markets, driven by a strategy to secure natural resources overseas to compensate for insufficient domestic mineral resources. This is exemplified by the 2004 'Going Global' (or 'Going Out') strategy, which subsidizes Chinese companies' acquisitions of resources abroad.
• China's aluminum industry is characterized by high demand for high-tech goods like aircraft and automobiles, leading to a reliance on imports. In 2007, China's alumina output was 19.46 million tons (25% of world total) and electrolytic aluminum output was 12.56 million tons (32.8% of world total).
• The Mekong region is a strategic target for Chinese bauxite investment due to its proximity and resource abundance. Vietnam possesses the largest potential with approximately 5.4 billion tons of bauxite, 98% of which is in the Central Highlands. Bauxite resources in the Bolaven plateau of southern Laos were valued at US$3,200 million based on 2007 aluminum values.
• Chinese investors, including major firms like Chalco, Chinalco, Chalieco, and CNMIM, dominate the region. In Laos, they operate through consortia with Lao and Australian firms; in Vietnam, they focus on engineering procurement construction for alumina factories. China and Vietnam signed a 2006 memorandum of understanding (MOU) for bauxite mining and refining plants worth US$1.3 billion.
• The full value chain of aluminum production is hindered by energy costs. While bauxite mining and alumina production are relatively low-energy, aluminum smelting requires massive amounts of cheap power (approximately 14,000 megawatts per ton of aluminum). For production to be cost-effective, hydropower electricity needs to be priced at 2.5–3.5 U.S. cents/kilowatt, but Laos currently sells it at 5–6 U.S. cents/kilowatt.
• Bauxite mining in the region poses severe environmental and social risks, particularly the generation of alkaline red mud which threatens surface and groundwater. There are specific concerns regarding the transboundary Sekong River, where industrial waste from Laos could impact downstream livelihoods in Cambodia.
• Regulatory frameworks in Cambodia, Laos, and Vietnam are often inefficient, lacking clear tax and royalty structures, and suffer from a lack of public disclosure. Environmental Impact Assessments (EIAs) are frequently minimal or conducted by companies with conflicts of interest, such as the first alumina project in Lam Dong province where the investor, Vinacomin, conducted the EIA.

APA

International Institute for Sustainable Development (n.d.). In Search of Aluminum: China’s Role in the Mekong Region - Policy Brief. https://www.iisd.org/system/files/publications/in_search_of_aluminum_brief.pdf

Chicago

International Institute for Sustainable Development. In Search of Aluminum: China’s Role in the Mekong Region - Policy Brief. n.d. https://www.iisd.org/system/files/publications/in_search_of_aluminum_brief.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=In Search of Aluminum: China’s Role in the Mekong Region - Policy Brief |url=https://www.iisd.org/system/files/publications/in_search_of_aluminum_brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndsearch, author = {{International Institute for Sustainable Development}}, title = {{In Search of Aluminum: China’s Role in the Mekong Region - Policy Brief}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/in_search_of_aluminum_brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }