Chinalco may raise stake in Rio Tinto
Updated: 2008-03-19 16:52
Aluminum Corp of China (Chinalco), the nation's biggest aluminum maker, may raise its stake in the London-listed Rio Tinto PLC as part of a larger expansion effort, the China Securities Journal reported on Wednesday.
Chinalco would "adhere to the line of acquisitions" and step up efforts to "explore mining assets overseas," the newspaper quoted company general manager Xiao Yaqing as saying.
Chinalco might either raise or reduce its stake in Rio Tinto, based on its assessment of the global mining company's share price, he said. "At this moment, the possibility of raising its stake is greater," he added. The report said that Xiao expressed confidence about further domestic and foreign acquisitions.
Chinalco teamed up with Alcoa Inc in February to take a 12 percent stake in Rio Tinto for $14.05 billion, the largest overseas investment ever by a Chinese company.
Chinalco's listed unit Chalco, whose shares are traded in Shanghai, Hong Kong and New York, said on Tuesday that its 2007 net profit fell 13.65 percent to 10.22 billion yuan ($1.44 billion) due to price cuts of major products.
However, sales surged 17.51 percent to 76.18 billion yuan last year, largely driven by booming global demand.
China, the world's biggest producer and consumer of aluminum, produced 12.56 million tons of aluminum in 2007, up 34.33 percent over 2006. Meanwhile, consumption rose 43.48 percent to 12.44 million tons.
Chalco said that it planned to spend up to 4.18 billion yuan to purchase shares of six subsidiaries of the parent company. But Xiao, also president of Chalco, denied that the listed company would raise funds on the capital market.