Decarbonization
March 12, 2026
Can China succeed where Nigeria's ALSCON smelter failed?
Written by Greg Wittbecker
China’s Golden Concord Holdings Limited (GCL) has proposed building a 3 million ton-per-year primary aluminum plant in Nigeria. The country has underdelivered in the past. Could this proposed investment stick?
Here’s the backstory. The Aluminum Smelter Company of Nigeria (ALSCON) in Ikot Abasi was conceived as a major effort to establish primary aluminum production in the country.
On paper, it appeared to be a solid business case:
- Nigeria had plenty of natural gas for a power station to supply the smelter.
- The country would enjoy duty-free entry to the EU.
- Capital costs were relatively modest at the time, predating the Chinese arrival in the market and subsequent reduction in capital expenditure benchmarks.
However, ALSCON was a troubled venture from the start.
Production did not begin until 1997 after prolonged construction delays, difficulties in supplying gas to the power station, and a lack of marine infrastructure. It also experienced repeated shutdowns before ceasing operations in the early 2010s.
United Company Rusal (UC Rusal) acquired a controlling stake in 2007 and has been in dispute with the government ever since.
Capex comparisons raise questions
Golden Concord Holdings Limited (GCL) has been active in the solar industry and in large-scale gas power generation. From this perspective, GCL might be able to address the systemic challenge of securing reliable power for a smelter, something ALSCON never achieved.
China has also demonstrated an ability to build large overseas infrastructure projects under its Belt and Road Initiative. It has done this across Africa.
China has also established a foothold in Angola in primary smelting. In January, a greenfield smelter producing 120,000 tons per year was inaugurated at Barra do Dande Free Trade Zone, according to CRU Group analysis. (CRU Group is the parent company of AMU.)
The $250-million project is intended to scale up in size over the next two to three years. It was built at a cost of about $2,083 per tons of installed capacity. That is high by traditional Chinese capex standards but still competitive by world ex-China standards, depending on the scope of infrastructure included. Total capex may also decline as total capacity increases.
Business News Nigeria reported China’s proposed project could cost about $2 billion. Combined with the capacity of 3 million t/y referenced in social media posts by Nigeria’s Minister of Steel Development Prince Shuaibu Abubakar Audu, that would imply capex of roughly $667 per ton of installed capacity.
Numbers that low were achievable in China during the peak of its capacity buildout. But they are no longer realistic in China and would be even less achievable in Nigeria. The Angola precedent is a more realistic capex model and, frankly, would still be highly competitive relative to recent examples in the Middle East and South Asia.
Why this matters
This announcement comes on the heels of major announcements in Indonesia.
It is another sign prospective Chinese owners of primary capacity are focusing on offshore sites. The primary production cap in China appears more likely each time projects like these emerge.
From a geopolitical perspective, Nigeria fits China’s broader narrative of expanding influence in Africa.
It also dovetails with Belt and Road Initiatives, which aim to export Chinese expertise in large-scale infrastructure projects, export smelting technology, and deploy both low-skilled and highly skilled labor.
We should not dismiss the GCL project outright.
While cost estimates are likely to rise, the company’s ability to execute the project in partnership with Chinese technology providers such as Shenyang Aluminum & Magnesium Design & Research Institute (SAMI), Global Advanced Manufacturing Institute (GAMI) and Northeastern University Engineering & Research Institute (NEUI) should not be underestimated.
