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CHALCO Confident About Guinea Iron Ore Field Approval

August 24, 2010

Chalco says confident on Guinea ore field approval

(AFP) – 9 hours ago

SHANGHAI — Aluminum Corporation of China (Chalco) said Tuesday it was confident Guinea’s government would approve its bid to jointly develop a huge African iron ore field with mining giant Rio Tinto.

China’s biggest alumina producer signed an agreement with Rio last month to establish a joint venture to develop the Simandou project in Guinea, with the Chinese company to invest 1.35 billion dollars in the project.

“The agreement is pending approval from both the Chinese government and the Guinea government… I believe the Guinea government will approve it as it benefits the local economy, employment and infrastructure,” chairman Xiong Weiping told reporters in Shanghai.

Anglo-Australian giant Rio has been working on Simandou for about 12 years but has run into trouble with Guinea’s military rulers, who have handed part of its landholding to an Israeli billionaire.

The Guinean government has the option to buy up to 20 percent of the project, where operations are expected to start within five years.

Chalco is seeking to diversify from aluminium into other sectors such as coal, iron ore, rare earths and copper to become a global mining firm, Xiong said, as it has been hit by slowing demand and rising costs.

The listed unit of state-owned Chinalco reported a net profit of 530.6 million yuan (78.25 million dollars) for the six months ended June 30, compared with a net loss of 3.5 billion yuan in the first half of 2009.

However, it posted an overall loss in the second quarter.

Chalco posted a net profit of 627.2 million yuan in the first three months of the year, but had a net loss of nearly 100 million yuan in the second quarter as policies introduced in April to cool the property market hurt demand.

Chalco’s chief financial officer Chen Jihua said the firm’s losses were more than 500 million yuan in June and it remained in the red in July, although it was confident it could rebound in the third quarter.

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