Chinalco Says May Up Rio Stake If Conditions Right
Chinese aluminum maker Chinalco, which holds a minority stake in Anglo-Australian miner Rio Tinto, may raise its stake if market conditions are right but it has no timetable for such a move, its president said on Monday.
"Under the right market conditions, this is an option, it is possible. But we have not decided when," Xiao Yaqing told a briefing for reporters in Shanghai.
Chinalco and U.S. aluminum firm Alcoa jointly purchased 12 percent of Rio's London-listed shares, or 9 percent of the total equity of the firm, in January.
The companies have won Australian government approval to raise their combined stake to 14.99 percent of the shares in Rio, equating to about 11 percent of the Rio Group.
Rio Tinto is defending itself against a $150 billion takeover bid from bigger rival BHP Billiton , which is awaiting clearance from Australian and European regulators, due later this year, before formally launching an offer.
Xiao, also the chairman of Aluminum Corp of China (Chalco), controlled by Chinalco and China's largest alumina and aluminum producer, added that in the second half of this year alumina prices were expected to be volatile and primary aluminum prices were expected to fluctuate around 18,000 yuan ($2,628) per ton.
He added that aluminum prices may also be rather volatile, and that production may be restricted if power prices keep rising.
Chalco said on Friday its first-half net profit fell by about two-thirds, dented by high production costs, output disruptions and oversupply in the aluminum market.
The company's shares in Hong Kong fell 3 percent at the opening on Monday, while its Shanghai-listed shares were down 3.83 percent.