Chalco plans to buy controlling shares of local aluminum corporation

The Aluminum Corporation of China Limited (Chalco), China's largest aluminum producer, said in a statement Thursday to buy controlling shares of China's third largest aluminum corporation.

After completion of the acquisition, Beijing-based Chalco will hold 29 percent of the total share capital of the state-owned Lanzhou Aluminum Corporation Limited (Lanzhou Aluminum), thus becoming the largest shareholder of Lanzhou Aluminum, Chalco said in the statement.

The two sides signed the letter of intent Wednesday, the statement said.

The existing total share capital of Lanzhou Aluminum comprises 540 million shares, of which 300 million are listed shares.

Lanzhou Aluminum Plant holds 42.4 percent of its total shares capital. After the acquisition of its 29 percent of shares capital by Chalco, Lanzhou Aluminum Plant will become the second largest shareholder of Lanzhou Aluminum, holding 13.4 percent of shares.

The statement from Chalco said that specific consideration of the acquisition together with terms and conditions will be finalized in the acquisition agreement to be entered into.

Established in September 2001, Chalco is China's sole producer of aluminum and largest producer of primary aluminum, with aluminum production in 2003 ranking the second in the world.

Chalco was listed on both the New York Stock Exchange and the Stock Exchange of Hong Kong in 2001.

Founded in April 1999 in Lanzhou, capital of northwest China's Gansu Province, Lanzhou Aluminum mainly produces aluminum and aluminum processing products and is one of China's 10 largest aluminum corporations. It got listed on Shanghai Stock Exchange in July 2000.

China is the world's second largest consumer of primary aluminum.

Source: Xinhua