Chinalco Has No Immediate Fund-Raising Needs


Chinese aluminum giant Aluminum Corp of China (Chinalco), which led a $14 billion equity investment in global miner Rio Tinto in January, has no immediate plans to raise money to help
fund overseas acquisitions, its president said.

Rio Tinto

Chinalco President Xiao Yaqing said the state-owned firm and its listed arm Chalco were financially healthy and he did not see any need for the parent to raise funds through Chalco in the near term, the South China Morning Post reported on Thursday.

"Chinalco has 200 billion yuan ($28.14 billion) of assets and our gearing is only about 40 percent," Xiao said.

Chinalco, the world's third-largest alumina producer through Chalco, and U.S. firm Alcoa , the world's top alumina maker, this year gate-crashed BHP Billiton's plan for a takeover of Rio with a $14 billion purchase of a 9 percent stake in the company. 

Rio's Albanese Says Chinalco Stake Bolsters BHP Rejection

Chinalco's purchase of a stake in Rio adds fire power to Rio's rejection of BHP's hostile takeover bid, Chief Executive Tom Albanese said on Wednesday. Rio Tinto has rejected BHP Billiton's $147.4 billion offer on the grounds that in understates Rio's worth.

"I see this as a strategic investment that (Chinalco) have made, and it reinforces the value message that we have been saying from the beginning," Albanese told reporters in Toronto after a speech to a mining conference.

Chinalco's chairman has on many occasions reiterated that his company has no plans at this stage to increase its stake beyond that.

BHP is offering 3.4 of its shares for every Rio Tinto share, a sweetened offer valued at $147.4 billion when it was formally made in early February.

Rio has consistently said the offer from its bigger Australian rival is too low, and Albanese said on Wednesday the company's positions in iron ore and aluminum, as well as its 2007 financial results, show "the momentum continues to favor Rio Tinto, and time will continue to favor Rio Tinto."

In the domestic market, Chinalco this week agreed to take over Shenyang Nonferrous Metals' processing plant in Liaoning and invest at least $422.5 million into the plant.

Late last year, Chinalco signed an agreement to buy a majority stake in Yunnan Copper's  parent company, which is expected to cost it another 9.5 billion yuan.

Fast-expanding Chinalco is selling 4.18 billion yuan worth of shares in five aluminium fabricating plants and one aluminium smelter in China. Chalco is a potential buyer.