Aluminum Corp of China Ltd (Chalco), the world's second-biggest alumina producer, has said it would set up a primary aluminium joint venture with a total investment of 2.38 billion yuan (293 million US dollars) in north China's Shanxi Province.

The new plant, co-invested by Hong Kong-listed Chalco and Shanxi Guanlu, a local aluminium smelter listed on the Shenzhen Stock Exchange, has a total registered capital of 1 billion yuan (123 million US dollars), China Daily on Thursday cited a Chalco statement as saying.

Chalco will pump 510 million yuan (63 million US dollars) in cash for a 51 per cent stake in the new venture, and its partner Shanxi Guanlu will inject 490 million yuan (60 million US dollars) worth of assets from an existing smelting facility for the remaining 49 per cent, according to the accord.

The new Chalco-Guanlu investment will have an annual production capacity of 220,000 tons of primary aluminium. It will also be involved in the production and sale of carbon anodes, generation and sale of electricity, as well as development and provision of ancillary technical services, the Chalco statement said.

Chalco said the establishment of the venture would help to reduce market risks of the group's aluminium products.

"The setting up of the joint venture aims to further enhance our production capacity and strengthen vertical integration in the company's aluminium production business," it said.

Chalco is principally engaged in bauxite mining, alumina refining and primary aluminium smelting. The main business of Shanxi Guanlu lies in the production and processing of primary aluminium.

Source: Xinhua