Companies to forge partnership

China Mineral and Metal Group (China Minmetals) and Chile-based Codelco, the world's largest copper producer, are discussing the formation of a strategic partnership, according to a senior Chilean official.

"Codelco is interested in having a long-term agreement with China Minmetals to obtain funding for its projects as a trade off to securing a long-term supply of copper to China," Chilean ambassador Pablo Cabrera told China Daily.

The partnership will be in a similar vein to those China Minmetals has made with some other foreign companies, he said, adding that China Minmetals and Codelco have been in close contact in recent months, according to Tuesday's China Daily.

It is reported that the Chilean President Ricardo Lagos formally gave State-owned Codelco the "go-ahead" to talk with China Minmetals in July.

Before that, however, the two companies had already had some contact.

Joint ventures might be established by the two companies to finance projects in Chile, the ambassador said.

And technological co-operation will also be part of the agreement.

The co-operative package is expected to secure a long-term and all-around alliance, instead of focusing on a single project, Cabrera said.

An official from China Minmetals, who asked not to be named, said the company is interested in making inroads into the Latin American market, particularly in Chile and Brazil.

But he refused to reveal the progress of the negotiations with Codelco, for the sake of "business confidentiality."

Chile produces 4.9 million tons of copper annually. About 850,000 tons are exported to China, accounting for more than 60 per cent of its total exports.

Analysts say the co-operation between the two giants will be a win-win deal, as Codelco gets financing and China Minmetals gets copper.

The ambassador also confirmed that the two companies are now talking about jointly exploring a copper mine at Gaby in Chile, which involves an investment of US$500 million.

He said the project is still under negotiation, and he expected to "have some news by the end of the year."

The two companies' talks followed the establishment of a joint commission on mining between China and Chile, the world's largest copper consumer and supplier, in May.

The commission aims to help identify opportunities for mining investment and the development of joint projects.

Codelco's production rose 5.1 per cent to 832,000 metric tons in the first half of the year. Output includes the company's five mines and its share of output from El Abra, a mine in which it has a 49 per cent stake.

China Minmetals, answering the State's calling of "go global," is now active in talks with a number of global mining companies to jointly explore the international market. It is also China's aim to diversify and secure raw material supplies, according to the president of China Minmetals, Miao Gengshu.

The company now has an alumina mine in Australia, with a production capacity of 3 million tons annually, he said.

(China Daily)