China’s Xinye Special Steel Launches 180,000-Ton Aluminum Plant in Ethiopia

Chinese steel and aluminum major Xinye Special Steel has officially launched a new electrolytic aluminum plant in Ethiopia, with an annual production capacity of 180,000 tonnes. Located in the Gada Special Economic Zone, approximately 65 kilometers southeast of Addis Ababa, the facility is designed to bolster local supply and reduce the country’s reliance on aluminum imports.

Strategic Announcement and Operational Details

The launch was announced on September 28 by Xu Wenping, President of Xinye Special Steel, during a meeting with Zeleke Temesgen, President of the Ethiopian Investment Commission, alongside several other Chinese companies interested in the Ethiopian market.

The plant utilizes the electrolytic reduction process to produce primary aluminum from alumina. However, the facility will continue to import a portion of its raw materials, as Ethiopia currently lacks significant commercial alumina production.

Key Strategic Advantages:

• Logistics: The plant’s location offers a logistical advantage, situated near the corridor connecting Addis Ababa to the Port of Djibouti, the country’s primary supply route.
• Industrial Impact: For Addis Ababa, the project is a key industrial driver. Local production aims to limit metal imports and support aluminum-intensive sectors, including:
  • Construction
  • Electrical equipment
  • Transportation
  • Manufacturing activities

Rusal’s Proposed 500,000-Ton Project

Xinye’s investment comes at a time when Ethiopia is also courting another major player in the aluminum industry. In November 2025, Ethiopian Investment Holdings and the Russian group Rusal signed a memorandum of understanding (MoU) to develop an aluminum smelter with a proposed capacity of 500,000 tonnes per year.

• Investment: The first phase of the Rusal project is estimated at approximately $1 billion.
• Timeline: The announced development schedule is 3 to 4 years.
• Status: At this stage, the Rusal project remains in the preparation phase and is not yet operational.

If both projects reach their announced capacities, Ethiopia could eventually gain an additional 680,000 tonnes of annual production capacity. This would strengthen the country’s position in an African aluminum industry currently concentrated in a few major sites, notably in South Africa and Mozambique.

Energy, Competitiveness, and Carbon Considerations

Access to reliable electricity will be the determining factor for the competitiveness of this energy-intensive industry. Ethiopia holds significant hydroelectric potential, particularly with the Grand Ethiopian Renaissance Dam (GERD), which has an installed capacity of 5,150 MW.

The development of this sector also occurs in a context where carbon footprint has become a critical commercial factor in international markets. Since January 2026, the European Union has applied its Carbon Border Adjustment Mechanism (CBAM), which covers aluminum among other goods.

Conclusion

For now, Xinye Special Steel represents the concrete, operational project with an announced capacity of 180,000 tonnes, while Rusal’s proposed 500,000 tonnes remain contingent on the successful realization of the project.

• Immediate Goal: Reduce Ethiopia’s reliance on aluminum imports.
• Long-Term Vision: These investments could pave the way for production destined for regional markets, positioning Ethiopia as a growing hub in the African aluminum industry.