By Entorno | 2025-03-13

China's state-owned Aluminum Corporation of China (Chinalco) is set to launch a bauxite extraction project in Suriname in 2026, raising environmental concerns and deepening the South American nation's financial dependence on Beijing.

Chinalco plans to invest $426 million in the venture, aiming for an annual output of six million tons of bauxite, according to Surinamese government advisor Daniel Lachman.

Lachman said that under the agreement, Suriname will primarily benefit from royalty revenues rather than from taxes paid by the Chinese firm.

The project is part of China's broader strategy to secure long-term raw material supplies, meet rising domestic demand and reduce reliance on other international suppliers.

Beyond resource acquisition, the initiative strengthens China's economic and political influence in South America, particularly in the region's mining sector. But Suriname’s growing reliance on Chinese financing has heightened its vulnerability to Beijing's economic policies.

Debt trap

In Suriname, concerns are growing that decades of mounting debt to China could hinder future development and burden the country with liabilities far beyond its capacity to repay.

China holds approximately 17% of Suriname's total public debt, with the country owing $476 million to the Export-Import Bank of China and another $68 million to the Industrial and Commercial Bank of China.

Struggling with overdue payments of $140 million, Suriname renegotiated its debt with Beijing in November, Reuters reported in November.

Foreign Minister Albert Ramdin, recently elected president of the Organization of American States, played a key role in the talks, leveraging his diplomatic ties with Chinese officials to secure a rescheduling agreement.

'Suspicious situation'

On February 26, the newspaper De Ware Tijd reported that nine civil society groups are considering suing the Surinamese state over the proposed agreement between the government and Chinalco to mine bauxite in the Bakhuis Mountains in western Suriname.

Several aspects of the Chinalco project raise serious concerns, corporate law analyst Antoon Karg told De Ware Tijd.

He specifically pointed to the extensive tax exemptions granted to Chinalco as overly generous.

"This is a suspicious situation, and it is not what we elected our government to do," Karg told the media outlet.

Karg highlighted a clause in the draft agreement in which the government pledges to assist Chinalco if it faces legal challenges from local regulations or conflicts with Indigenous communities.

He criticized this provision. The state should protect the interests of its people, not those of foreign investors, he said.

Environmental impacts

Another major concern is the agreement's weak environmental protection. It lacks clear regulations and imposes no penalties for violations, said Karg.

"There is an attempt to undermine… the mandatory environmental studies," he warned.

Environmental groups warn that bauxite mining devastates forests, threatens biodiversity and pollutes water sources with toxic runoff.

The process also degrades air quality, accelerates erosion and depletes soil fertility, making recovery challenging.

Local and international NGOs have raised concerns that the most affected ethnic groups -- Arawak, Carib and Maroons -- have deep historical and cultural ties to the region, making the 280,000-hectare area project's impact even more severe.

The mineral exploration and extraction zone in Suriname holds an estimated 324 million tons of low-grade bauxite, a crucial raw material for aluminum production.

Aluminum's light weight and durability make it essential for industries such as construction, aerospace and automotive manufacturing.