Power Investment Energy announced on June 28 that Inner Mongolia Houmei Hongjun Aluminum Power Co., Ltd. intends to invest in the construction of Tongliao Zahanauer 350,000 tons of green aluminum project (Zhaal Phase II), with a total investment of 3.179 billion yuan.
The 13th meeting of the seventh Board of Directors of the company reviewed and passed the motion on the investment and construction of 350,000 tons of green electric aluminum project in Tongliao City (Zhaal Phase II) by Inner Mongolia Huomihongjun Aluminum Co., LTD.
Acording to the company, Inner Mongolia Houmei Hongjun Aluminum Power Co., Ltd. is a subsidiary of Power Investment Energy holding 51% of its equity.
The project is located in Zhahanauer Industrial Park, Zarut Qi, Tongliao City, Inner Mongolia Autonomous Region, close to Huolingol City, planning to build 350,000 tons of electrolytic aluminum, supporting the construction of 650,000 kilowatts of wind power project, 100,000 kilowatts of 2-hour electrochemical energy storage project and 38 kilometers of 220 kilovolt power transmission and transformation project, in accordance with the source network load and storage integration mode to promote the implementation. These projects have been incorporated into national and local development plans.
In January 2024, the State Power Investment Group Corporation submitted to the Inner Mongolia Autonomous Region the Report of the State Power Investment on Implementing Several measures to Promote high-quality Development in Inner Mongolia and Strive to Write a New Chapter of Chinese-style Modernization: Build a green electricity high-load energy demonstration project, accelerate the construction of Zahanauer 350,000 tons of green electricity aluminum project, and help the north of Tongliao to build a national green circular economy industrial park demonstration.
Power Investment Energy announced that the implementation of the Zhaal phase II project will become the first domestic green aluminum production line, leading the aluminum industry chain from "coal aluminum" to "green aluminum" low-carbon transformation and upgrading. The construction of Zalu Phase II and supporting projects will usher in the accelerated upgrading of the circular economy of Huolinhe River. After completion, it will form a circular economy industrial cluster with 1.21 million tons of electrolytic aluminum production capacity, 1.8 million kilowatts of thermal power installed capacity, 1.7 million kilowatts of new energy installed capacity, 100,000 kilowatts of 2-hour energy storage, and the proportion of green electricity (landscape) consumption exceeding 40%. To achieve green and high-quality development of Huolinhe circular economy industrial chain Carbon steel coil/High carbon steel strip.
According to the optimized investment and financing mode, the total investment of Zal Phase II project is 3.179 billion yuan, and 40% of the plan in the feasibility study report is its own funds, and the rest is bank loans. During the implementation of the project, about 1.8 billion yuan of the project company's own funds will be given priority, and the remaining construction funds will be resolved through bank loans.
In addition to its own funds, the remaining fund gap of about 1.4 billion yuan is planned to meet the construction needs through 2-year project loans combined with financial institutions' 1-2-year Northeast revitalization bonds, equipment renewal and reconstruction reloans, carbon emission reduction trading tools, green credit and other special preferential loans (interest rate of about 2.5%), which will be replaced by 10-year project loans one month before the completion of the project to ensure the safety and stability of funds. Strive to reduce the financing cost and improve the overall benefit of the project through the best loan structure mild steel coil.
It is estimated that the total annual profit of the project during the operation period is 528 million yuan, the internal rate of return on investment is 16.4% (after tax), and the investment payback period is 7.1 years. The net profit rate (ROE) of the project capital is 30.6%, the financial internal rate of return of the capital is 29.3%, and the payback period of the capital investment is 4.9 years.
The total investment financial internal rate of return (IRR) of the project is 8.1% (after tax), the capital financial internal rate of return is 15.5%, the investment payback period is 7.5 years, and the financial indicators are good, meeting the requirement of return rate.
Power Investment Energy said that the investment is to meet the national and local green low-carbon development strategy and the high-quality development requirements of the industry, to create domestic green aluminum demonstration, to promote the green transformation and upgrading of the circular economy, to effectively revitalize the company's electrolytic aluminum production capacity indicators, and to help improve the quality and efficiency of stock assets.