A view of Chongqing Jiulong Wanbo New Material Technology Co Ltd. (Photo/Yuan Lingnan)

Chongqing - In Chongqing's Wanzhou district, the Chongqing Jiulong Wanbo New Material Technology Co Ltd factory is the Bosai Group's new plant. Today, Bosai Group's entire alumina production capacity has been relocated to this new facility.

This large-scale alumina plant boasts an annual output of 4 million tons and annual sales exceeding 15 billion yuan ($2.07 billion), with products exported to over 30 countries. It is the largest single-site alumina plant in China, and with an additional 2 million tons of planned capacity, it is set to become the largest in the world.

Yuan Lingnan, son of Bosai Group Chairman Yuan Zhilun, spearheaded the Jiulong Wanbo project. Thanks to these achievements, the 32-year-old was appointed as Bosai Group's general manager, marking a full takeover of the family business operations.

A supply crisis

In 2018, Yuan Lingnan, then-vice president of Bosai Group, began to feel an increasing sense of urgency and unease.

Starting from the latter half of that year, the bauxite that Bosai Group sourced from Guizhou Province began encountering serious issues. Either the quality declined, or delivery times were extended until supply was eventually halted altogether.

Guizhou was a crucial source of raw materials for the Bonsai Group. The city of Qingzhen in Guizhou hosts the largest contiguous mining area in the country, with prospective reserves of bauxite exceeding 500 million tons, accounting for over 10 percent of the national total.

At the time, Guizhou ramped up its regulatory measures on bauxite mining due to considerations for environmental protection, safety, and resource conservation. This led to a sharp decline in production, barely meeting local demand, let alone providing supply for out-of-province companies like Bosai Group.

To make matters worse, another key source of bauxite for Bosai Group—Nanchuan district in Chongqing—also tightened oversight measures, which halted all mining operations.

Faced with an annual bauxite demand of 3 million tons and the abrupt loss of its two main supply channels, Bosai Group was pushed to a critical state of "having no rice to cook."

"During those tough days, I shared the same anxiety as my father," said Yuan Lingnan. He wasn't willing to simply let it be. In his view, "retreat" should not be the way for him.

This was the result of years of influence by his father Yuan Zhilun, a prominent figure in China's alumina industry. He instilled in his son not just a business but also a spirit of seizing opportunities and resilient entrepreneurship.

After graduating from university in 1984, Yuan Zhilun began working at a centrally administered State-owned enterprise in Guizhou, handling metal import and export trade. He noticed that large quantities of bauxite were being exported abroad due to the weak foundation of the domestic metallurgical processing industry and limited demand.

Nanchuan is a bauxite-rich region in Chongqing, with reserves estimated at 50 million tons.

Yuan Zhilun began to think, "Why not open a mine in Nanchuan and start local production?"

In 1997, Yuan Zhilun took the bold step of leaving his secure, well-paying job to return to Chongqing and start his own business. A few years later, he established the Nanchuan Pioneer Alumina Refinery Co. Ltd., the first private alumina refinery in China.

Over the following two decades, Yuan Zhilun acquired or established numerous upstream and downstream companies in the alumina industry chain, forming the Bosai Group. Navigating through various economic cycles and overcoming numerous challenges, he finally built the business into a global leader. The group achieved industry-leading status through perseverance, with products like brown fused alumina and silicon-manganese alloy consistently ranking first in global production and sales.

Having fought hard to reach the top of the industry, Bosai Group could not afford to wait passively in the face of adversity. "If we can't source domestic bauxite, we'll abandon domestic suppliers and look internationally," Yuan Lingnan proposed.

Looking at his son, who was barely in his twenties, Yuan Zhilun nodded in agreement.

They sprang into action immediately. Yuan Lingnan led a team overseas, approaching international giants like Rio Tinto and Emirates Global Aluminium. After several rounds of tough negotiations, they finally secured contracts.

In February 2019, when the first shipment of 74,000 tons of bauxite left Australia and arrived in Chongqing after a 25-day, nearly 10,000-kilometer journey, the entire company erupted in applause: "We made it through!"

A tough decision

After successfully securing bauxite from abroad, it seemed Bosai Group had weathered the storm and was poised for a full recovery. However, a bigger challenge soon emerged—problems in the factory's production process.

The production lines at Bosai Group’s alumina plants were originally designed to process domestic monohydrate bauxite, utilizing a high-temperature, high-pressure extraction method. In contrast, the imported ore is trihydrate bauxite, which requires a low-temperature, low-pressure extraction process.

"The difference in production techniques can greatly affect product quality," explained Yuan Lingnan. For instance, alumina powder requires an aluminum content of 99.7 percent and minimal trace elements. High levels of trace elements would force downstream electrolytic aluminum producers to use more additives, raising production costs and impacting market orders.

Faced with this issue, Bosai Group had to make a crucial choice.

Sticking to the existing plants would leave no room for introducing new production lines. While technical upgrades would be less costly, they would inevitably lead to being phased out by the market in the long run.

On the other hand, building a new factory with modern production lines would cost up to 10 billion yuan—a risky gamble for any company, with uncertain prospects for recouping the investment.

"Let's build the new plant in Wanzhou district and gradually shift all production capacity there," proposed Yuan Lingnan. Wanzhou offers the largest port in east Chongqing and the Three Gorges Reservoir area. Once the imported bauxite arrives in Wanzhou via river-sea combined transport, it can be directly conveyed to the factory production line using belt systems, eliminating the need for road transport.

"Nanchuan is where our business started; how can we easily talk about relocating?" someone argued.

"When we first built Pioneer Alumina Refinery in Nanchuan, it was because of the local resource advantage," Yuan Lingnan responded. "After more than 20 years, those resources are no longer sustainable. Now, logistical advantages are far more important for the company."

With the support of the young successor, the Jiulong Wanbo project began to build. In March 2022, when the 3.6-million-ton per year special aluminum new material project was put into operation in Wanzhou, the Pioneer Alumina Refinery in Nanchuan, after struggling through seven rounds of technical upgrades for two years, was fully shut down. By the end of that year, Bosai Group had completely exited Shuijiang Alumina Refinery in Nanchuan, finalizing the full transfer of production capacity.

In 2022, Yuan Lingnan was officially appointed as the General Manager of Bosai Group, taking full control of the company's operations.

From Nanchuan to Wanzhou, the Bosai Group marked two eras—one belonging to the father and one to the son. As the son carried on the family business, what kind of results did he deliver?

Firstly, advanced process technology. The new plant in Wanzhou built four production lines, each with an annual capacity of 900,000 tons, to process foreign bauxite. It pioneered industrial-scale production with bauxite residue ironmaking technology and created a 5G+ smart factory.

Secondly, high-quality products. The new plant in Wanzhou produces alumina powder that rivals international manufacturers, with many of its indicators reaching globally advanced levels.

In 2023, Bosai Group's alumina powder sales reached 4 million tons, four times the volume in 2020, with revenue exceeding 15 billion yuan. Its market share in the Sichuan-Chongqing, Southwest, and Northwest regions surpassed 90 percent.

Global resource layout

With the new plant in Wanzhou on track and the group's production capacity fully transitioned, many people think business is secure as long as normal production is maintained.

However, Yuan Lingnan did not see it this way. The previous bauxite crisis and the unpredictable markets still weighed heavily on him. In recent years, domestic bauxite production has been on a downward trend—by 2023, China’s dependence on foreign bauxite had reached 68 percent.

Bosai Group needs 13 million tons of bauxite annually, and the demand is increasing year by year. Although the bauxite supply from countries like Australia and Guinea is stable, fluctuating Sino-Australian relations and political instability in Guinea present risks.

Securing self-controlled bauxite resources was crucial. Yuan Lingnan’s focus shifted to the mining assets Bosai Group had acquired years earlier in Guyana, South America.

However, its annual mining capacity in Guyana remained around 1 million tons for years. Moreover, there were no mature cargo shipping routes or logistics systems between Guyana and China, and shipping the ore back was costly. Therefore, the ores produced by this mine could only be sold locally, and they didn't contribute to Bosai Group’s capacity expansion. Even during the supply crisis in 2018, the Guyana mine was unable to provide much support.

At a critical moment, distant water couldn't solve the immediate thirst. After the stable operation of the Wanzhou plant, Yuan's most important task became: "No matter what, we must get the bauxite from Guyana back."

After careful planning, Yuan Lingnan took several measures:

First, he invested $250 million in expanding production by purchasing equipment, increasing the Guyana mine's capacity from 1 million tons per year to 4 million tons, which would meet local market demand while providing additional support for China.

Second, he invested another $250 million to build a new transshipment system at the Guyana port. This increased the port's cargo transshipment capacity from 50,000 tons to 200,000 tons, reducing transportation costs.

Third, he purchased four cargo ships and formed a fleet to improve transport efficiency.

"By the end of this year, we will be able to bring our own bauxite back. At that time, the company will have 5 million tons of bauxite annually to secure our supply, which will reduce our dependence on international markets. This will greatly enhance our influence and bargaining power in the international market, as well as our ability to resist risks," said Yuan Lingnan.

He also acquired the Matthews Ridge manganese mine in Guyana, which has a reserve of 30 million tons and an annual mining capacity of 2.5 million tons, producing 500,000 tons of manganese concentrate per year.

To date, Bosai Group has secured 300 million tons of bauxite and 30 million tons of manganese reserves in countries participating in the Belt and Road Initiative, completing its global resource layout.

(Tang Qin and Zhou Qi, reporters from Chongqing Daily, contributed the Chinese version of this report.)