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Alcan in Talks to Raise Investment in China Aluminum Smelter

Author: An Zhuo
by An Zhuo
Posted: Dec 18, 2015

Nov. 6 (Bloomberg) -- Alcan Inc., the world's second- largest aluminum producer, is in talks to increase its investment with China's No. 2 maker of the lightweight metal to tap rising demand.

The Canadian company is ``looking at taking a larger position'' by investing in an expansion at state-owned Qingtongxia Aluminium Group, Cynthia Carroll, head of Alcan's primary metal group, said. ``We are very pleased with the progress that has been made.''

Alcan, which has a 50 percent stake in Qingtongxia's third production line through a joint venture, wants to increase market share in China, where demand is forecast to double by 2015. Swiss commodities trader Glencore International AG signed an agreement to buy a shares in Qingtongxia in August.

``We continue to look at other opportunities in China,'' Carroll said in an interview in Beijing on Nov. 3. ``Aluminum is the most sought-after metal in China.''

Aluminum for delivery in three months has risen 38 percent in the past year on the London Metal Exchange as economic growth in China, the fastest-growing major economy, increases demand for beverage cans and cars.

Alcan set up its joint venture with Qingtongxia, located in western Ningxia autonomous region, two years ago. The venture includes a 150,000 metric ton capacity smelter, or the No. 3 smelting line, and a coal-fired power plant.

``We are obviously still very much interested in the option on the No. 4 smelting line,'' which was completed last year and has a capacity of 250,000 tons a year, James Zhao, director in charge of Alcan's Asia primary aluminum business, said in e-mail response to Bloomberg News questions yesterday.

Glencore Interest

Baar, Switzerland-based Glencore, the world's biggest commodities trader, has signed an initial agreement to buy an unspecified stake in Qingtongxia, Merlin Wang, a company official at Beijing office, said on August 10.

``This news has no effect on Alcan's productive joint venture with Qingtongxia,'' Zhao said. ``We are not aware of the details of the Glencore-Qingtongxia deal.''

China's aluminum demand and supply ``will be in balance'' in a few years, said Carroll. Demand, which grew by more than 10 percent last year, will ``maintain similar growth rates over the next few years,'' she added.

The economy in China, the world's biggest producer and consumer of aluminum, expanded 10.4 percent in the third-quarter of the year.

About the Author

Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

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Author: An Zhuo

An Zhuo

Member since: Dec 01, 2015
Published articles: 27

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