Chalco to raise capital in Guangxi alumina joint venture

Aluminium Corp of China Ltd (Chalco), the world's second largest alumina producer, said on Monday it will contribute 701 million yuan ($86.5 million) to the capital of a Guangxi joint venture. The joint venture partners had agreed to further increase total investment in alumina firm Guangxi Huayin Aluminium Co Ltd to 8.49 billion yuan, it said in statement.
Chalco announced in January that it planned to double the annual designed capacity of the Guangxi joint venture to 1.6 million tonnes from 800,000 tonnes and lift total investment of the alumina project to 668 million yuan from 10 million yuan.
Beijing has given its approval for the first phase of the development project.
Chalco said on Monday that its partners, Guangxi Investment Group Co Ltd and China Minmetals Non-ferrous Metals. Co Ltd, would also contribute 721.5 million yuan and 701 million yuan to the registered capital of the venture, respectively.
Chalco will hold a 33 percent stake in Guangxi Huayin, which will explore for bauxite resources and produce and sell alumina and related products.
China Minmetals will own 33 percent of the venture and Guangxi Investment will have 34 percent, the company said.
Chalco said it has made the first payment of 116.85 million yuan to the venture company and planned to use internal resources to fund the investment.
The company said the Guangxi project could exploit the bauxite reserves in China's Guangxi autonomous region, enabling it to produce alumina to capitalise on a current supply shortage and growing demand for alumina in China.
The project is expected to eventually produce 3.2 million tonnes of alumina per year after a second phase of construction.
But a government official said in May that the local government was reconsidering the expansion as it was afraid central government's control on the energy-intensive aluminium industry might force some smelters to shut down in the next two years.
Alumina is the main raw material from which aluminium is made.
The State Development and Reform Commission approved the project in May after construction had been slowed down for a year.