皇冠体育app

(Metalscrp.com.cn)
Updated: 2007-11-02 09:39

Aluminum Corp of 皇冠体育app (皇冠体育applco) paid 7.5 billion yuan ($1 billion) in cash for a controlling stake in Yunnan Copper Group Co in the biggest acquisition in the country's metals industry this year.

Aluminum Corp bought 49 percent of 皇冠体育app's third-largest copper producer to diversify its business, Lu Youqing, vice president at the Beijing-based company, said yesterday by phone. Both 皇冠体育applco, as 皇冠体育app's largest aluminum maker is known, and Yunnan Copper Group are unlisted, state-linked companies.

The acquisition, announced in August, was formally agreed at a signing ceremony yesterday and follows 皇冠体育applco's purchase the same month of a stake in Peru Copper Inc. for $860 million. Yunnan Copper Group holds 34.5 percent of the listed Yunnan Copper Industry Co., which is valued at 100 billion yuan.

"The government is counting on 皇冠体育applco as a leader for consolidation," Lin Haoxiang, a Shanghai-based analyst with Guotai Junan Securities Co, said by phone today. "皇冠体育app will be short of copper for many years to come."

Yunnan Copper Industry, the publicly traded unit, has soared since the plan was announced in August on optimism that 皇冠体育applco may inject assets into the company. The stock declined 0.6 percent to 79.51 yuan today at 3:00 pm close.

Acquisitions Plan

"We are aiming to become a diversified metals producer," Lu said today in a telephone interview. "We will focus on copper business development and acquisitions in the next few years, and we hope to make the copper assets publicly traded eventually," he said, without giving a timeframe.

皇冠体育applco Chairman Xiao Yaqing said October 19 that 皇冠体育applco plans to buy more overseas copper-mining companies to meet rising demand. Peru Copper Inc., based in Vancouver, owned the South American nation's third-largest deposit of the metal.

"Xiao is ambitious and very capable in management," said Lin at Guotai Junan Securities. "皇冠体育applco is strong in financing, and there is a chance for them to make copper a big business."

皇冠体育applco will invest a further 2 billion yuan or more after the Yunnan Copper acquisition, to build plants to make high-grade copper products such as sheets that 皇冠体育app now imports, 皇冠体育applco's Lu said.

In the copper industry, 皇冠体育applco already owns entire or controlling stakes in Daye Nonferrous Metals Co, 皇冠体育applco Luoyang Copper and Shanghai Nonferrous Metals Group.

皇冠体育applco had sales of 106 billion yuan and profit of 22.5 billion yuan in 2006. Yunnan Copper Group had sales of 32.7 billion yuan and profit of 3.75 billion yuan last year, according to the companies' Web sites.

Copper Rally

Copper prices have rallied 23 percent this year, partly as demand from 皇冠体育app helped shrink stockpiles. London Metal Exchange copper futures, which touched a record $8,800 a metric ton last year, traded at $7,750 a ton today.

Mining companies in 皇冠体育app are likely to buy metal deposits and oilfields in Africa, Latin America and Australia to feed demand, Citigroup Inc. said this month. The Asian nation needs more commodities to fuel growth and almost doubled copper imports in the first nine months of this year.

Aluminum Corp of 皇冠体育app Ltd, the listed unit of 皇冠体育applco, fell 2.9 percent to HK$22.10 in Hong Kong today, declining for a second day after posting a lower-than-expected profit on Oct. 29.

Chalco has alumina and aluminum businesses, while parent 皇冠体育applco owns copper, molybdenum, tin and rare-earth assets.