Aluminum Corp of China, or Chinalco, and its United States partner are considering whether to raise the recently bought stake in Anglo-Australian iron ore miner Rio Tinto, and reiterated that the overseas buy won't be the last one.
Chairman Xiao Yaqing said in Shanghai that the company was in discussions with Alcoa Inc regarding the issue and will do it if the price is attractive.
Chinalco earlier this year bought a 12-percent stake in Rio's London-listed shares with Alcoa for US$14.05 billion, thwarting a takeover bid for Rio by BHP Billiton, the world's largest mining company.
A higher Chinalco holding would make it even difficult for BHP to proceed with its bid. In February, Xiao said in Sydney that the Rio buy was a strategic move and it may sell the holding in future to make a profit. The Rio purchase underscored the development strategy of Chinalco, China's top producer of aluminum, which is diversifying into other metals such as copper to become globally competitive.
"Based on international experience, a company with single metal business is hard to become a real global one," Xiao said. "Our partnership with Alcoa is a long strategic one, and the Rio deal will absolutely not be the last one for us."
Chalco, the listed unit of Chinalco, has all its business related to aluminum at present, and Xiao said Chinalco may eventually inject assets of other metals to the listed unit.
Xiao said Chalco will be acquiring more aluminum-processing business, a sector in which it lags behind peers such as Alcoa and Alcan.
Chalco fell 9.76 percent to 22.2 yuan in Shanghai after a 25-percent drop in second-half earnings.
(Shanghai Daily March 19, 2008)
