Australian aluminium prices have fallen almost 40 per cent in the past year as production has fallen and investors have been nervous about the prospects for global demand.
In a bid to make up for the drop, Chinese manufacturers are investing heavily in the domestic market.
The aluminium price collapse, which has forced many to take a second look at buying Canadian ore, has been particularly damaging to the mining sector.
Last week, the Australian mining group Glencore, which is the world’s second-biggest aluminium producer after Australia, announced a $US1 billion ($1.05 billion) investment into an aluminium plant in New South Wales.
In addition, the Chinese state-owned Chinese National Heavy Industries Co Ltd has announced an investment of $US500 million ($450 million) in a $5 billion aluminium plant.
But despite the investments, the industry is still reeling from the drop in price.
“I think it’s going to be a long time before we can get a real sense of what is going on with the aluminium market, given that there is a lot of uncertainty around the world,” Mr Mihalyan said.
At the moment, there are about 40 million tonnes of aluminium in Australia, making up about 15 per cent of the global market.
However, this is expected to drop to 5 per cent by 2020.
What’s the cost of aluminium?
Australian aluminium ore is currently worth about $US100 per tonne, which works out at around $2,500 per ton.
Although aluminium has been a valuable metal for thousands of years, the price of aluminium has fallen over the years as mining activity in China has decreased.
Australia has about 3,000 tonnes of raw aluminium ore in the world, mostly in the Kimberley, the Sunda and the Murray-Darling Basin.
However in recent years, this has increased to about 30,000 tonnes in the Sundaland.
Aluminium is also mined in Chile, Argentina, the USA, India, Malaysia and Indonesia.