One of the hot discussions in the aluminium world at present is the question of how quickly China can replace Indonesian bauxite with material from other sources. Indonesia stopped exports in January of this year, seeking to keep the value-add inside their own country.

The Indonesians insisted that anyone who wanted their bauxite had to stump up the capital to build alumina capacity in country. Several projects have been announced, though perhaps only 1 shows any sign of making significant progress.

Now the government of Guinea is hinting that the same rule should apply. Keeping the value-add in their own country delivers a huge bonus to that country’s economy, as the Indonesians already worked out.

But I remain skeptical as to just how much capacity China will really build outside its own country, and here’s why.

One of the best analysts around is Lloyd O’Carroll, based in the USA. Lloyd recently published his excellent quarterly aluminium update, and in it he reports that by the end of this year, China will have 65 million tonnes of capacity in alumina refining. Given metal production will be around 26.5 million tonnes this year, there’s plenty of capacity available.

But here’s the rub. To the end of August (the last month for which details are available), China had imported 3 million tonnes of alumina. That begs the question as to why it would import alumina when it has plenty of capacity, and the answer is because they have to - it takes too long to bring new bauxite sources into full flow.

But that’s not my point here. My point is, why would anyone lay down significant capital in a foreign country when you already have plenty of capacity at home?

I suspect that the promises being made are what one Australian politician called “non-core promises”. Promises that you can wiggle out of if you have to.

All of which leads me to provide you with this cartoon.