AluNews - March 2017

Second Tasmanian bauxite mine?

The Advocate - March 31st, 2017

A second Tasmanian bauxite mine might be operating within about a year.

Australian Bauxite Limited has high hopes for its Fingal Rail project, near Conara.

It expects to start a large tonnage field test of the company's TasTech technology in April.

"If customer support is sufficient, this second mine could commence within 12 months," the company said in its recently released annual report for 2016.

The company already mines bauxite at Bald Hill, near Campbell Town.

It said it was speeding up the development of the TasTech technology, which allowed it to separate bauxite into three product types.

"This will allow simultaneous production of high grade metallurgical grade gibbsite bauxite … for the aluminium industry, cement grade bauxite for the production of cement, fertiliser grade and other bauxite types," chairman and former Tasmanian premier Paul Lennon said in the report.

In 2016, he said, the company extended its capacity to supply cement grade bauxite into Australasian and other markets while remaining ready to sell metallurgical grade bauxite when the seaborne bauxite market "returns to balance and prices improve".

The company has 22 bauxite tenements in Tasmania, New South Wales and Queensland.

China to add 6.65 mil mt/year new alumina capacity in 2017: Antaike

Platts - March 23rd, 2017

China is expected to add 6.65 million mt/year of new alumina capacity in 2017, chiefly in North China, Central China and Northwest China, in addition to the 79.25 million mt/year built national alumina capacity as of end-2016, state-run metals consultancy firm Beijing Antaike has forecast in its aluminum sector report on Thursday.

Shandong Province in North China is expected to add 2 million mt/year new alumina capacity and Henan Province in Central China is to add 1 million mt/year new alumina capacity in 2017, the Antaike report showed.

Shanxi Province and Inner Mongolia Autonomous Region, both in Northwest China, are forecast to add new alumina capacity of 2.6 million mt/year and 500,000 mt/year, respectively, in 2017, the agency figures showed.

China is also expected to add an extra 5.7 million mt/year new alumina output capacity in 2018, with 2 million mt/year in Shandong, 1.8 million mt/year in Shanxi, 300,000 mt/year in Chongqing City in Sichuan Province, and 1.6 million mt/year in Guizhou Province in Southwest China, according to Antaike.

Meanwhile, the agency has forecast China's national alumina demand in 2018 to hit 75.16 million mt, up 5.5% year from the estimated demand of 71.24 million mt in 2017. The growing alumina demand forecast is due to the rising refined aluminum output in China.

China's national refined aluminum output in 2016 hit 32.65 million mt, up 6% year on year, with compound output growth rate of 9.2% in the 2014-2016 period, figures from Antaike showed.

The Beijing agency has forecast China's net alumina imports in 2018 to hit 4 million mt, up 11% from an estimated 3.6 million mt imports in 2017.

China's national alumina output in 2018 is expected to be 72.5 million mt, up 6.9% from an estimated 67.8 million mt output in 2017.

The agency has forecast China's alumina supply in 2018 to be 76.5 million mt, up 7% from estimated 71.4 million mt in 2017.

The country's alumina surplus in 2018 is expected to be 1.34 million mt, widening from an estimated surplus of 160,000 mt for 2017, the Antaike figures showed.

Due to surging raw material costs, Chinese domestic alumina production costs (excluding tax) as of end-2016 averaged Yuan 2,060/mt ($299/mt), up 8.9% year on year, but stable from end-2014, the agency figures showed.

Gov't to set up Bauxite-Aluminum Authority – Nana Addo

Citi FM Online - March 22nd, 2017

President Akufo-Addo has announced that government will set up an integrated bauxite-aluminum development authority in the next three months.

According to him, the authority will help create a strong aluminum industry, and ensure that relevant resources are gathered to check its exploitation.

Speaking at the 5th Africa CEO Forum held in Geneva, Switzerland, on Tuesday, March 22, 2017, Akufo-Addo said, his government is committed to harnessing the country's natural resources to promote economic growth.

"Our country has enormous natural resources; bauxite, iron ore. They remain untapped and underdeveloped. We've taken the decision that come what may, we are going to bring those resources to play. An integrated bauxite-aluminum development authority is going to be established in the next three months in Ghana which is going to have a task of mobilizing the relevant resources to be able now to have an integrated aluminum industry in Ghana right from the exploitation of the raw bauxite up to the production of the aluminum products," Akufo-Addo said.

He reiterated his government's resolve to be self-reliant and build local capacity to generate prosperity.

"We want to build economies that are self-reliant, have the capacity to compete and generate prosperity for our people…The attitude of the government is to begin to take Ghana beyond aid."

"We are required to have our own programme, our own analysis of how we can get out from poverty to prosperity. I am exceptionally optimistic about the future of Ghana because the resources are there," he added.

Massive Debt Forces Chinese Firm to Idle Smelter, Refinery in Shandong

Aluminium Insider - March 22nd, 2017

According to Aladdiny, a Chinese information provider, Shandong Qixing Group Co., Ltd. suspended operations of its 130-thousand-metric-ton-per-annum aluminium smelter and is planning to stop production at its 500-thousand-metric-ton-per-annum alumina refinery due to the firm's substantial debt burden.

The report went on to say that the company might consider re-starting production in six months should the market be conducive to it.

This situation points up a larger problem occurring in the Chinese aluminium industry – stifling debt. Several companies borrowed heavily to expand capacity in recent years, only to find the significant rise in capacity to which they contributed sinking aluminium prices. The global drop in prices quickly erased whatever temporary gains were made with the ramp-up in capacity, plunging those smelters below the break-even point and making servicing those debts impossible.

To make matters worse, credit of all kinds dried up, causing the housing market to go into decline. Additionally, spending on infrastructure dropped off as well. Both these events made the sale of aluminium an even more ticklish task.

The difficulties plaguing Shandong Qixing have also affected many of the larger producers to one degree or another. The Aluminium Corporation of China increased assets from CNY82 billion in 2006 to CNY175 billion in 2012. However, as assets increased, so did the losses – Chalco recorded a loss of CNY17 billion in 2014, which was the biggest loss by any of China's state-owned enterprises.

Another major Chinese aluminium player has been forced to deal with accusations of carrying significant debt loads as well. Privately-held China Hongqiao was accused of hiding over US$3 billion in debt by a short seller earlier this month, allegedly by underreporting and related-party subsidies. The allegations took a toll on the stock price in the hours after they were made public, causing it to drop almost nine percent before Hongqiao called for an emergency halt to trading. Hongqiao continues to categorically deny the allegations.

High electricity prices are driving Australia's aluminium industry out of business

Aluminium Insider - March 22nd, 2017

Record high power prices are making difficult times worse for the aluminium industry in Australia. The latest victim is the Boyne Island smelter majority owned by Pacific Aluminium (a wholly owned subsidiary of Rio Tinto, and co-owned by several Japanese companies), who decided to reduce production by 14% or some 80,000 tonnes/year at the end of March. Worse, by the end of the month, the Hazelwood 1760 MWh coal fired power plant will also be closed,. Some 100 smelter workers will lose jobs, or approximately 10% of the workforce. Since electricity costs have doubled since October 2016, the Boyne Island smelter was unable to secure the missing 140MW at reasonable prices. 85% of the smelter's electricity comes from the Gladstone Power Station, a 810MW plant that is 42% owned by Boyne Island under a contract due to last until 2029. However, the remaining 15% is purchased on the open market.

Secondly, during the February heat wave, the Tomago smelter (also owned by Pacific Aluminium) had to curtail operations for four hours so power could be diverted to Sydney residents some 150 kilometers away. Approximately 300 MW were therefore diverted to households. The plant didn't have much say in the matter: with the exception of 50MW, which it purchases on the spot market, Tomago gets most of its energy from a long-term contract signed with AGL Energy. Power supply contracts for large consumers, and aluminium smelters, now typically include clauses allowing generators to divert power to residential users and essential services such as hospitals.

Lastly, a power outage at Alcoa's Portland smelter last December caused molten aluminium to solidify, while the production had to be reduced to less than a third of nameplate capacity. Alcoa agreed to resume full production only after obtaining a government backed rescue package worth A$240 million (US$ 182 million) over four years. The government's financial aid is conditioned on the smelter remaining open at least until 2021 and output remaining at a minimum of 90 % of pre-blackout levels. It is expected to take six months to bring back to full production. Interestingly, the outage coincided with the conclusion of a favorable power supply contract struck with the government 30 years ago.

The Portland smelter directly employs about 500 full-time employees and 160 contractors,while some 2000 spin-off jobs rely on the plant's operations. Once repair works are completed, the smelter's capacity will be restored to around 300,000 tonnes /year. Under the government-backed plan, the smelter also signed a four-year power supply deal with AGL Energy for 510 MW, or about 10 % of the state's electricity load. No details were disclosed on the pricing.

In the wake of the deal, Alcoa wrote down its stake in the Portland smelter by US$ 126 million, implying a value hit of US$ 229 million for the whole plant, because of higher power prices under the new power deal signed with AGL Energy. The smelter had already reported a US$ 30.2 million full-year loss in 2016, on lower aluminium prices and lower production.

Power prices soar

Extremely high power prices and frequent power failures in February have brought Australian aluminium smelters, and other energy intensive industries, to the brink of extinction. Even though most of the production is secured thanks to long term power contracts with favorable prices – significantly lower than current spot prices – unpredictable power interruptions and blackouts have severely shaken the industry. The sudden and unannounced failures of gas generators were mostly to blame for unexpected blackouts during last month's heat wave, according to Australia's energy operator. The combined failures left about 2,000MW power unavailable during the peak period of demand.

Average spot power prices in February in Australia were between 98 % and 360 % higher than a year earlier, with prices in Queensland averaging US$ 239.60/MWh, according to Citigroup. Forward prices were up in all states by 33 % in February over January, and rose by US$ 100/MWh for 2017-18 in all states. Next, as Australia is increasing its exports of liquefied natural gas (LNG) in a bid to become the world's largest exporter, there is a real threat of a gas crunch in 2019, which could trigger industry supply cuts and power outages,

Secondly, a shift away from coal-fired power plants amid a rush to meet a national 20 % renewable energy target by 2020 has left the country unprepared for the record high electricity demand during hot weather. The paradox is Australia is among the world's largest producers of coal and gas while also experiencing power blackouts and load shedding. Big companies and major exporters, such as BHP and Rio Tinto, complain they are having difficulties competing internationally because of Australia's much higher power prices compared to other world regions. The companies also warned that the investment climate is not promising for the future.

In a bid to prevent future power blackouts, the Australian government has been rushing to embrace quick fixes. Virtual power stations are being proposed, made up of thousands of batteries spread across suburban neighborhoods that can be controlled by utilities. Sophisticated computer programs will adjust the flow between the energy stored from solar panels or wind turbines and consumption. The system would also work towards lowering price spikes during times of high demand. A recent analysis by SunWiz has predicted exponential growth in home battery storage. In 2016, there were 6750 battery installations, up from 500 in 2015.

Conclusions

The primary aluminium industry in Australia has gone through difficult times during the summer months. Since the summer months of the Southern Hemisphere have passed, smelters are in line for a period of relief, at least until demands peak again during summer and winter. Australian smelters will produce a projected around 1.6 million tonnes of aluminium in 2016-17, down from around 1.96 million tonnes in 2011-12. Exports are expected to amount at US$ 3.3 billion, according to IBIS World. Approximately 90% of the industry's exports are destined to Asia.

However, most local experts and analysts do not see a quick solution to the problem and expect power plants failures and electricity price spikes to continue, albeit to a lesser extent. The Hazelwood power plant closure, set for the end of March, has also heightened worries about the risk of blackouts on a grid with reduced access to baseload power. It is obvious that transition form coal and gas powered plants to renewable energy (wind and sun) has jeopardized the entire Australian electricity system, causing damages and major losses to industries. The bottom line is that the government erred by rapidly switching to renewable energy sources without valuing energy security.

Nalco hopeful of achieving targeted aluminium output

The New Indian Express - March 21st, 2017

ANGUL: Despite economic slowdown, National Aluminium Company (Nalco) is hopeful of achieving the targeted aluminium production from its smelter plant here in the current financial year.

"We are on the way of achieving the target by the end of the current fiscal with most of the dead pots being made operational in the last two years.

The current year target remains at 3.85 lakh tonne. Next year's target is also fixed at 4.4 lakh which we can also achieve," said We are on the way of achieving the target by the end of the current fiscal with most of the dead pots being made operational in the last two years of the public sector company here.

This is seen as a revival mode for the plant which witnessed worst day in 2013-14 when it could run 625 aluminium producing pots out of 960 pots installed in the smelter plant here. Nalco produces aluminium from alumina which comes from its refinery unit at Damanjodi of Koraput district.

Nalco was in slump three years ago due to falling aluminium price at the international market and high price it was paying for coal import. As a fallout, it had to reduce its number of working pots to 625 to produce less for financial viability. Out of the 960 pots, it normally operates 940 leaving the remaining in maintenance, according to the official source.

However, after the current CMD TK Chand took over, immediate steps were taken to revive those dead pots to achieve normal production level as he adopted multifarious measures to combat the recession in aluminium market, both at domestic and international level. Now, the daily production has hiked to 1100 tonnes against 800 to 900 tonne of aluminium earlier.

With the boost in aluminium production, the company authorities also plan to operate an additional 120 mega watt unit at its captive power plant here. The power plant has 10x120 MW units it runs as even now because of lack of coal, the official said.

Brazil aluminum output up in Jan-Feb

BN americas - March 20th, 2017

Brazil's primary aluminum output in January-February was 129,300t, up 2.5% year-on-year, according to data from industry association Abal.

Primary aluminum output in February rose 0.5% compared to the same month last year to 61,500t, the tenth consecutive monthly increase.

For full-year 2016, output was 792,700t.

Abal is made up of CBA, part of local conglomerate Votorantim, as well as Alcoa, BHP Billiton, Albras and Novelis.

Ranked nine among the world's largest aluminum producers, Brazil has dropped several places over the past few years in the global upstream segment. However, it is still a major player with an integrated chain that includes bauxite mining, alumina refining and primary aluminum production.

Iran Smelts 270 Tons of Aluminium Over Last Eleven Months

Aluminium Insider - March 14th, 2017

According to numbers just released by the Iranian Mines and Mining Industries Development and Renovation Organization, Iran delivered over a quarter billion tons of mineral products through the first eleven months of the Iranian year.

The country's overall mineral production for the first eleven months of the year totaled 284 million metric tons. Output for Bahman, the eleventh month of the year, fell by 7% month-on-month, totaling 24.9 million metric tons.

Iran's aluminium sector turned out 269.915 tons of aluminium ingots for the first eleven months of the Solar Hijri year, which was a 1.03% decline over the same period last year. The country's sector is composed of three major producers: Iran Aluminum Company, Hormozal Aluminum Company, and Almahdi Aluminum Company.

The publicly-traded Iran Aluminum Company (IRALCO), which was the first firm in the country to produce aluminium, produced 124.912 tons through the month of Bahman. IRALCO's alumina powder output was off slightly over the period, falling 3.73% to 215.209 tons.

Hormozal Aluminum Company, which jointly operates a 147-thousand-metric-tons-per-year smelter in the southern port city of Bandar Abbas with a firm from Italy, produced 89,090 tons of aluminium for the first eleven months of the Iranian year of 1395.

Almahdi Aluminum Company smelted a total of 55.973 tons through February 18.

Though still developing, Iran's mining sector is a significant contributor to the global mineral market, typically ranked among the top fifteen mineral-rich countries on Earth. The Persian country boasts sixty-eight types of minerals under its soil, totaling some 37 billion metric tons of proven resources and over 57 million metric tons of potential reserves. Iran's total reserves are estimated to be worth US$770 billion in 2014 dollars, but it is not a significant contributor to the country's economy, accounting for only 4% of the nation's GDP. The country's mining sector is hampered by a lack of appropriate infrastructure, legal barriers, difficulties in exploration, and the government's control over the entirety of the country's mineral resources.

Swiss trading firm Sider Alloys carrying out due diligence on Alcoa's Portovesme smelter

Metal Bulletin - March 13th, 2017

Swiss trading firm Sider Alloys is carrying out due diligence on the mothballed Alcoa aluminium smelter Portovesme, according to Metal Bulletin sources.

The Swiss multinational trading firm based in Lugano has been carrying out the process for the past few weeks with a view to buying the Sardinia-based plant. A number of other international parties are also thought to be interested in the facility.

In particular, the sourcing of alumina at the plant, located in Carbonia-Iglesias, Sardinia, is of key interest, Metal Bulletin understands.

Various Italian outlets have reported that Sider Alloys has already made an offer for the smelter, but this is yet to be confirmed. The Federation of Italian Metalworkers has said on its website that talks are ongoing between the parties and that Sider Alloys is said to be working on another offer in the coming days, although this too is unconfirmed at this stage.

Sider Alloys is yet to comment.

Alcoa announced in August 2014 that it would be permanently closing the Portovesme primary aluminium smelter, after a nearly two-year curtailment period.

Throughout this period, Alcoa worked with the Italian government to find a new owner for the plant. However, in 2016, the company said that it would proceed with the decommissioning of the site, having failed to find a buyer.

To afford the Italian government additional time it signed a tentative agreement with Alcoa late in 2016 whereby Alcoa would divest the Portovesme smelter to federal inward-investment agency, Invitalia, which would either transfer the smelter to a new buyer or proceed with decommissioning if no buyer was found after 12 months, Alcoa told Metal Bulletin on Monday March 13.

"The tentative agreement includes important conditions that must be met before a definitive agreement can be reached. We look forward to working with the government to achieve a final solution," it added.

When it was open, Portovesme had a smelting capacity of about 150,000 tpy. About half of the plant's production was aluminium billet, while the rest was ingot and slab.

Metro Mining unveils expanded bauxite resource

Proactive Investors - March 13th, 2017

Metro Mining (ASX:MMI) has integrated two separate geological models to create a single expanded resource for its Bauxite Hills Mine located in northern Queensland.

The combined resource incorporates the recently acquired neighbouring Skardon River Project and stands at 144.8 million tonnes of direct shipping ore (DSO).

Metro finalised the acquisition of Gulf Alumina Ltd in January 2017, before which both Metro and Gulf owned standalone projects with resources estimated using separate geological models.

Following the acquisition, Metro has moved quickly to integrate the separate geological models and create a single resource.

The integrated resource forms the basis for the development of an optimal mine schedule in the bankable feasibility study.

Bauxite Hills Mine summary

The Bauxite Hills Mine is situated 95 kilometres north of Weipa on Queensland's Cape York Peninsula and 5 kilometres south-east of the port at Skardon River.

Western Cape York is world-renowned for its deposits of high-quality, export-grade bauxite.

The Skardon River will be used to transport the DSO product on shallow draught barges which will tranship the product 5–10 nautical miles offshore for loading into Ultramax and Panamax vessels.

Transhipping provides a low environmental footprint, with minimal onshore buildings and stockpiles required.

Resource details

The global 144.8 million tonnes grading 49.2% aluminium oxide and 13.9% silicon dioxide is comprised of the BH1 resource, the BH6 resource and the BH2 resource.

Details include:

- BH1: 28.6 million tonnes at 51.2% aluminium oxide, 9.6% silicon dioxide incorporating close-spaced 80x80 metre drilling;
- BH6: 104.5 million tonnes at 48.6% aluminium oxide and 14.8% silicon dioxide; and
- BH2: 11.7 million tonnes at 49.1% aluminium oxide and 15.7% silicon dioxide.

Fiji Announces First Shipment of Bauxite Ore in 2017

Aluminium Insider - March 10th, 2017

The island nation of Fiji shipped its first batch of bauxite ore earlier this week.

According to local media, William and Goslings Operations & Logistics loaded 70 thousand metric tons of bauxite aboard its vessel, the MV Ocean Merry, at the port of Galoa in the province of Bua, located on the western coast of the northern island of Vanua Levu.

According to a spokesperson from Williams and Gosling, the vessel, which last weighed anchor in the People's Republic of China, is returning to the Middle Kingdom with this load of bauxite. Neither the buyer for the ship's cargo nor the specific port to which the ship was headed was mentioned in the report.

This first sale occurs significantly earlier in the year than Fiji's first shipment of 2016, which did not take place until early September. The generally challenging bauxite market, coupled with issues surrounding the ore's quality, made securing the sale difficult. Both issues were eventually overcome, however.

The Republic of Fiji is home to the Vanua Levu mine, which is one of the largest bauxite mines in Oceana, with reserves estimated at one billion metric tons. Known for its picturesque beauty, the country has been a difficult location to conduct mining operations due to a military coup in 2006, a constitutional crisis in 2009, and an ongoing military dictatorship.

TAKRAF wins major contract in Africa

Dry Bulk Magazine - March 9th, 2017

TAKRAF GmbH, a Leipzig based company with a wealth of experience in development, design, fabrication, erection and commissioning of equipment and systems for the global mining and material handling industry, has secured a major contract for the turnkey supply and installation of a bauxite handling plant in Guinea, West Africa. The contract value is approximately €100 million.

Compagnie des Bauxites de Guinée (CBG), jointly owned by the international mining houses ALCOA, RIO TINTO, DADCO and the State of Guinea, mines and exports bauxite for more than 50 years and has put in place an ambitious program to increase their export capacity, for which TAKRAF supplies equipment for the unloading of railcars and crushing and conveying of the bauxite.

A major challenge is the brownfield character of the works, which means that the new supplies and modifications to the existing plant have to be carried out whilst the installation is in operation. Very limited plant downtime and difficult conditions for logistics are a further challenge.

TAKRAF is executing this contract in close cooperation with their subsidiaries in the US, China and South Africa, whereas the project lead is based in Leipzig, Germany. TAKRAFs CEO Dr Frank Hubrich underlines the importance of this project for the implementation of the company in the important markets in western Africa and praises the good cooperation between the different entities of the company. The commissioning of the plant is scheduled for 2H18.

TAKRAF, with roots dating back to 1725 and with more than 1000 employees worldwide, is affiliated to TENOVA spa, a technology based group of companies based in Milan, Italy, which in turn belongs to the Italian engineering company TECHINT, a leading integrated supplier of technology and turnkey industrial plants.

Guinea, situated on the west coast of Africa, boasts the world's largest reserves in bauxite, a raw material used for the production of alumina, which is used in the smelting of aluminium, a metal important in the aviation industry, automobile fabrication, and many more durable goods manufacture.

Rio Tinto cuts output further at Australian aluminum smelter

Reuters - March 3rd, 2017

Rio Tinto and its partners are cutting output and jobs at the Boyne aluminum smelter in Australia, adding to cuts announced in January, it said on Friday, blaming a jump in power prices.

Rio said output would be cut by 14 percent and that "a significant number of jobs lost".

"Boyne Smelters has been working hard to secure a competitive energy deal. Both parties have been negotiating in good faith but ultimately could not reach agreement," Rio Tinto said in an emailed statement.

The latest production cut follows plans in January to cut output this year by about eight percent, or 45,000 tonnes, because of rising costs of power, 85 percent of which is provided by Gladstone Power Station.

Boyne said in January power prices had doubled since October 2014 and it could not secure an internationally competitive price for the 15 percent of power it needed to supplement its long-term contract.

Boyne is majority-owned and operated by Rio Tinto and co-owned by Japan's YKK Aluminium, UACJ Corp, Mitsubishi Corp, Marubeni Corp, Sumitomo Corp and Sumitomo Chemical.

Electricity is a major cost for aluminum smelters who have struggled with poor margins. Aluminium prices have risen this year but oversupply remains an issue.

Rio sold its aluminum business in Britain last year, while Russia has put forward the idea of an OPEC-like body to boost aluminum prices.

Nalco logs highest ever bauxite output, production up 17%

Business Standard - March 2nd, 2017

National Aluminium Company Ltd (Nalco) has posted 16.8 per cent growth in its bauxite production in the April-February period of this fiscal, achieving a volume of 6.56 million tonne.

Bauxite production till February is Nalco's highest since its inception. Similarly, the hydrate production at its Damanjodi refinery has also registered an increase of 6.8 per cent. The hydrate production till February 2017 was 1.89 million tonne as against 1.77 million tonne for the same period in the previous year.

At its Angul aluminium smelter, cast metal production grew by 3.79 per cent and the aluminium metal sales grew by 2.68 per cent. With the aluminium market firming up the navaratna PSU foresees sunny days ahead and is planning to increase its cast metal production by 12 per cent in the next fiscal.

China orders aluminum, steel cuts in war on smog

Reuters - March 1st, 2017

China has ordered steel and aluminum producers in 28 cities to slash output during winter, outlined plans to curb coal use in the capital and required coal transport by rail in the north, as Beijing intensifies its war on smog, a policy document shows.

The 26-page document dated Feb. 17 and seen by Reuters did not include some stringent steps proposed in a draft policy to slash fertilizer output and introduce a full ban on coal being handled at Tianjin, one of the country's busiest ports.

The government has called on steel producers to halve output in four northern provinces - Hebei, Shanxi, Shandong, Henan - as well as Beijing and Tianjin, during the peak winter heating months around late November to late February. The size of the cuts will depend on the level of regions' emissions cuts.

Steel mills in Hebei, China's top steel producing province, must meet targets for cutting overcapacity this year, ahead of schedule. Cuts at mills in the cities of Langfang and Baoding should be a top priority, the statement said.

Producers must also cut aluminum capacity by more than 30 percent and production of alumina, an ingredient used to make the metal, by more than 30 percent across the 28 cities.

Based on the cuts over three months, the measures would reduce China's total annual steel output by 8 percent annually and aluminum output by 17 percent, according to Reuters calculations.

Transporting coal by truck in Hebei and Tianjin will be banned from the end of September, forcing consumers, miners and traders to use the railroad, it said.

The joint statement was issued by the Ministry of Environmental Protection (MEP), Finance Ministry, National Development and Reform Commission (NDRC) and the National Energy Bureau as well as regional governments.

An official from the MEP confirmed the document was authentic. The other government departments did not respond to requests for comment.

The policy comes ahead of the government's annual parliamentary session, which starts on Sunday when tackling pollution will be a big topic of discussion.

China's northeast has battled some of the worst pollution in years this winter as emissions from heavy industry, coal burning in winter and increased transport have left major cities including Beijing blanketed in thick smog.

The latest order comes after the MEP proposed these measures, as well as other more stringent steps, in a draft policy document seen by Reuters last month.

The regions affected are some of the country's most populated and most smog-plagued and account for one third of China's crude steel output. Hebei, Henan and Shandong are the top three aluminum producing regions accounting for around 70 percent of total output.