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Tuesday, November 13, 2001, updated at 16:19(GMT+8)

Chinese, US Aluminum Firms Form Strategic Partnership

China Aluminum Corporation Limited (Chalco) and Alcoa International (Asia) Ltd. of the United States exchanged here Monday approved strategic investor subscription agreements and signed an memorandum of understanding (MOU) on setting up a joint venture in China.


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A View of Chalco's Pingguo Aluminum Co. in south China
China Aluminum Corporation Limited (Chalco) and Alcoa International (Asia) Ltd. of the United States exchanged here Monday approved strategic investor subscription agreements and signed an memorandum of understanding (MOU) on setting up a joint venture in China.

Chalco is expected to launch its initial public offering (IPO) in New York and Hong Kong by the end of this year.

Under the strategic investor subscription agreement, Alcoa will buy Chalco's stocks equal to eight percent of Chalco's outstanding equity at the market price. This will be about 24 percent of Chalco's issued stocks.

Alcoa is also committed not to sell its Chalco stocks within 30 months after the IPO, the first launched by a Chinese company since the September 11 incident.

According to the MOU, the two parties will establish a 50-50 joint venture at Chalco's Pingguo Aluminum Co. in south China, and will expand Pingguo's production capacity significantly in the next few years.

The chairman of the joint venture will be appointed by Chalco and its general manager by Alcoa.

"This represents a great step towards a strategic alliance between China's largest aluminum company and the world's largest aluminum company," Chalco said in a news release.

Pingguo, one of the most efficient aluminum facilities in China, is capable of producing 400,000 tons of alumina and 125,000 tons of electrolytic aluminum annually.






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