Chalco may restructure Baotou firm
By Wan Zhihong (China Daily)Updated: 2007-06-14 08:32
Aluminum Corp of China Ltd (Chalco), the nation's biggest maker of the metal, said it might restructure Baotou Aluminum Co, prompting speculation it will acquire the company's assets.
The company is planning to hold restructuring talks with Baotou about the primary aluminum business, the company said in a statement yesterday.
Chalco did not reveal the details of the announcement. A spokesperson from
Chalco declined further comment. 
Chalco's shares were suspended in Hong Kong and Shanghai on Tuesday. The company's stock rose as much 4.8 percent to HK$11 after it resumed trading yesterday.
Chalco's Shanghai-traded stock will remain suspended until progress in the Baotou talks is made, the company said in a statement yesterday.
Negotiations may involve Chalco's parent, Aluminum Corp of China (Chinalco), the statement said. Chinalco holds 55.1 percent of Baotou's shares.
Chalco still might buy out Baotou, said an analyst who declined to be named. Earlier this year, Chalco bought out and delisted two of Baotou's other units, Shandong Aluminum Industry Co and Lanzhou Aluminum Co.
Chalco has been leading mergers and acquisitions in the domestic and foreign markets to expand its output capacity. The company said earlier it would buy processing plants from its parent to meet domestic demand, which is forecast to grow 20 percent annually.
In 2006, Chinalco posted 22.5 billion yuan in net profit, an increase of 18.1 billion yuan from three years before.
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Chalco is also exploring overseas markets such as Brazil, Australia, Vietnam and Guinea. The company signed an agreement in March with Australia's Queensland government to obtain mining rights to develop the Aurukun bauxite deposits.
Chalco will also complete a feasibility study by August to develop Vietnam's Dak Nong bauxite project and form a joint venture with Vietnam National Coal-Mineral Industries Group.
Earlier media reports said Chalco agreed to buy Peru Copper Inc for $792 million. The company denied the reports yesterday.
Chalco started selling 2 billion yuan of bonds to domestic investors yesterday to help to pay for expansion, the company said in a statement.
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