BIZCHINA / Top Biz News
Chalco leads rivals for Australia project
By Wang Ying
Updated: 2006-04-19 09:11
Aluminium Corp of China Limited, the world's second-biggest alumina
producer, looks set to beat out rivals in the running for a US$2.2
billion mining project in Australia.
The Chinese State-owned company, also know as Chalco, has been selected
from among other bidders to build a bauxite mine and refinery based in
Queensland, a senior company official in charge of Chalco's overseas
projects yesterday told China Daily.
"We are waiting for the final approval from the (Queensland) state
government," said the official, declining to be identified.
The company will begin a detailed feasibility study on the project after
finalizing the deal this year. The study will take a couple of years
before the start-up construction of the project, the official said.
Overseas-listed Chalco was one of 10 companies on a list to build the
mine drawn up by the Queensland government last year. BHP Billiton,
Mitsubishi Corp and Hindalco Industries Ltd were among the others that
expressed interest.
China's fast-growing economy has fuelled strong demand for alumina, a
white powder used to make aluminium. Bauxite is used to refine alumina.
The price of alumina has seen a 53 per cent increase over the past 12
months, as global demand soars.
Chinese aluminium companies had paid an additional 15 billion yuan
(US$1.8 billion) last year to cover the higher costs, Xiao Yaqing, Chalco
president, said in a press briefing yesterday.
Australia has 22 per cent of the world's proven reserves of bauxite,
while China has 2 per cent. By building the new bauxite project in
Australia, Chalco will gain an addition deposit of 650 million tons,
doubling the Beijing-based company's current reserves.
Lu Youqing, vice-president of Chinalco, parent of Chalco, yesterday said
the company might add an aluminium smelter to the bauxite and refinery
project if cheaper electricity is available. Power accounts for between
30 per cent and 40 per cent of an aluminium smelter's costs.
Chalcom's plants and research institute in China
Lu said Chinalco aims to make 80 billion yuan (US$9.9 billion) in revenue
this year, an increase of 23 per cent from the previous year. Before-tax
profit is expected to grow 19 per cent to 25 billion yuan (US$3.1
billion), he added.
Another unnamed Chalco manager said the company was poised to take a
controlling stake in an alumina plant in Viet Nam that would cost more
than US$1 billion. The remaining shares will be held by a Vietnamese
company for coal and mineral resource development.
"We are still in talks for the project (in Viet Nam), and construction
would not start until at least two years later," the manger said.
In addition, the company is also talking with counterparts in Brazil,
Guinea and Mongolia to build similar mining projects.
The official in charge of Chalco's overseas investments yesterday
disclosed that the company was conducting an investigation over a
resource-rich area in Guinea after the local government gave them
approval last November.
They are also in negotiations with neighbouring Mongolia to participate
in a copper mine with investments totalling about US$10 billion.
The Chalco senior official said Chalco's 50-50 joint-venture alumina
plant in northern Brazil with Vale do Rio Doce, the world's top iron ore
producer, would not be started until the second half of this year, due to
certain unstable factors that he refused to elaborate on.
The Brazilian project, which will cost US$1 billion, was originally
supposed to begin its construction by June.
"We are in constant contact with the Brazilian company for the project,
and hope to begin building the project within this year," the official
said.
Beijing-based Chinalco yesterday donated a total of 2 million yuan
(US$246,609) to the All China Women's Federation and the rural residents.
It also published its first social responsibility report detailing its
efforts to improve working safety and increase social investments.
(For more biz stories, please visit Industry Updates)
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