Interfax China reported that China's eastern Shandong Province, a major aluminum producing region plans to optimize the structure of its local aluminum industry so as to boost its capacity to produce high value added products by 2012.

Under the government's plan 70% of Shandong produced alumina and 100% of its primary aluminum output is to be processed locally by 2012. The province's capacity to produce high value added aluminum products such as aluminum plate, foil and industrial aluminum profile, is also to expand to account for more than 60% of total local aluminum fabrication capacity.

The government said technological upgrades and product development in the aluminum fabrication sector will be encouraged by government policies, while capacity expansion projects for alumina and primary aluminum will be strictly controlled.

According to the report projects that manufacture aluminum products for aviation, aerospace, transportation, packaging, home appliance and military uses will be given priority for development.

Furthermore, local alumina producers will be encouraged to develop overseas bauxite mineral deposits or sign long term supply contracts with international mining companies in order to alleviate bauxite shortages in the province. At present, more than 80% of the bauxite fed to Shandong's alumina producers each year is imported.

In 2007, Shandong produced 6.36 million tonnes of alumina 1.22 million tonnes of primary aluminum and 1.63 million tonnes of aluminum product.