Shanghai-based East Hope Group becomes China's first private firm getting a foothold in the country's alumina sector as it has invested 4.59 billion yuan (US$559 million) in an alumina project in Henan Province.

The project, under construction in Mianchi County of the central China province, will have a annual production capacity of 1.05 million tons, a company executive said Thursday.

Alumina is a kind of aluminum oxide and is used in aluminum production and in abrasives, refractories, ceramics, and electrical insulation.

Mianchi County is known for a proven reserve of 155 million tons of high-tenor bauxite, the principal ore of aluminum, and thefigure becomes 388 million tons when reserves in neighboring counties are put together.

"It is enough for an enterprise producing 2 million tons of alumina to operate for nearly 100 years," said the company official, who asked for anonymity.

China is a major aluminum producer in the world, but it can only meet some two-thirds of demand for alumina, to support its rapid economic development.

Henan's output of electrolytic aluminum accounts for a quarter of the country's total, however, it depends on imported alumina tofeed half of its demand. The province's demand for alumina is expected to reach 4 million tons by the year 2005, and it may haveto resort to foreign products to make up for the predicted 4-million-ton shortage.

(Xinhua News Agency August 7, 2003)