CHINALCO’s Investment Reaches Qinghai

On 18 March, CHINALCO and Qinghai Provincial People’s Government signed a cooperation framework agreement, with the two parties agreeing to implement full and strategic cooperation with Qinghai’s related companies regarding resource exploration and exploitation,and the aluminum industry.

Currently, CHINALCO’s operations in Qinghai mainly focus on the aluminum industry. In 2009, CHINALCO’s aluminum and aluminum alloy yield reached 0.5 million tons in Qinghai.“The cooperation between CHINALCO and Qinghai has been long-standing, and this most recent work has reached a new level,” said Xiong Weiping, CHINALCO General Manager.

Currently, among the 132 types of mineral materials verified in China, Qinghai has 54 types inside the national top 10 tables, 23 in national top 3 tables, and 9 top ranked types nationwide.CHINALCO aims to push the development of multiple metals, and focus on abundant mineral resources in Qinghai. “CHINALCO will build an important multiple metals industry base in Qinghai,” said Xiong Weiping.

According to reports, three or four years ago,the State Assets Administration Committee of the State Council decided that CHINALCO’s main businesses should be aluminum, copper and rare earth industries. Insiders have also told reporters that, currently, non-ferrous metal companies all want to develop forwards multiple metals to enhance their ability to combat risk. Meanwhile, various companies also want to control resources as much as possible. “This is an era in which natural resources are everything, and CHINALCO is no exception in terms of pursuing this trend.

On this subject, the same day, CHINALCO Mineral Resource Co., Ltd., CHINALCO’s domestic resource development department,also signed a cooperation agreement with the Qinghai Provincial Bureau of Exploration and Exploitation of Geology and Mineral Resources and the Qinghai Provincial Bureau of Exploration of Non-ferrous Geology and Mineral Resources.

According to Wu Tingxiang, Qinghai Provincial Bureau of Exploration of Non-ferrous Geology and Mineral Resources’ Chief, Qinghai Province will provide mineral rights and CHINALCO will provide funds covering the whole industrial chain including, but not limited to,exploration, exploitation and smelting of minerals. “Mineral type will focus on heavy metals, mainly iron, copper, lead and zinc.” However, specific investment sums are yet to be decided upon, said Wu.

In 2007, CHINALCO had in fact gradually invested RMB0.5 billion to explore and exploit mineral resources in Qinghai. However, “this time, our work will go deeper, with a higher capital investment,” said Wang Dongsheng,General Manager of CHINALCO Mineral Resource Co., Ltd.

In addition to mineral exploration, the arrangement between CHINALCO and the local non-ferrous metal companies will also provide unlimited inspiration. West Mining, a listed company in Qinghai, is a potential subject.

Currently, the eight mines under West Mining are mainly lead, zinc and copper mines, while West Mining is the largest lead concentrate producer and the fourth largest zinc concentrate producer. It is very much in line with CHINALCO’s development target towards heavy metals in Qinghai. However, Wang Haitao, the Chairman of West Mining, told us that there currently is no information to disclose.

However, guided by the multiple metal strategy,CHINALCO’s development in Qinghai will speed up. “Progress is made in June or July”,Luo Huining, the Governor of Qinghai, said.