Chalco agrees to build alumina plant in Guinea for $1bn
Aluminum Corp of China, the country’s largest State-owned producer of the lightweight metal, has agreed to invest $1-billion in an alumina plant in Guinea to tap local bauxite resources.
Chalco, as the Beijing-based company is known, will set up an entity to develop an 1.2-million-ton-a-year plant in the African country, it said in a filing. The government will get a 5% stake for free or at nominal cost, and be allowed to enlarge that holding at market value to as much as 35%.
Chinese companies – including Chalco’s largest private rival, China Hongqiao Group Co – have been expanding in countries rich in bauxite, the raw material used to make alumina, which is then processed further to aluminum. Over the past decade, Chalco has been developing the Boffa bauxite mine in Guinea, and the new project will be its first overseas alumina plant.
Chinese smelters — which produce more than half of the world’s aluminum — have a sharper focus on overseas expansions as domestic capacity nears a nationwide ceiling imposed by the central government to cut emissions.
The plan for the investment in Guinea still requires approvals from Chalco’s shareholders, as well as the nation’s government, according to the filing.
Chalco’s Hong Kong-listed shares traded higher on Friday, and have more than doubled over the past 12 months. Aluminum has surged 22% in London this year, benefiting producers, as the Middle East war hurt exports from the region.
