Aluminum giant Chinalco gets state nod to enter iron ore business
24 Jul 2010
China's state-owned aluminum giant Chinalco this week received approval from the Assets Supervision and Administration Commission of the State Council (SASAC) to include iron ore and other non-ferrous metals to its core businesses.
Beijing-based Chinalco, founded in 2001 with the merger of twelve aluminum companies, is the country's largest aluminum producer and the country's second-largest producer of copper.
It also produces non-ferrous metals like titanium and expects to be a leading titanium producer in the Chinese market.
The SASAC approval, Chinalco will now be able to mine iron ore as also other non-ferrous metals and provide technical services in these areas.
Chinalco applied for the SASAC approval after it formed a joint venture with the world's second-largest iron ore miner Rio Tinto for developing the Anglo-Australian company's Simandou iron ore deposit in Guinea, West Africa. (See: The story behind Rio's $1.35-billion Saimandou deal with Chinalco)
With a 9 per cent stake, it is also the single-largest shareholder in Rio Tinto and is currently planning to buy a stake in the massive Oyu Tolgoi copper-gold project in Mongolia, which is held by Rio Tinto and Canada's Ivanhoe Mines. (See: Mongolia approves Rio Tinto's Oyu Tolgoi copper-gold complex)
Chinalco had been often criticised in the past that its investment in the iron ore industry is at the behest of the Chinese government, although it holds no experience in iron ore mining.
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