Chinalco may buy more stake in Rio

Aluminum Corp of China (Chinalco), China's top producer of aluminum, is in discussions with its U.S. partner Alcoa Inc on whether to raise the recently bought stake in Anglo-Australian iron ore miner Rio Tinto if the price is attractive, said Chairman Xiao Yaqing.

Earlier this year, Chinalco acquired a 12% stake in Rio's London-listed shares with Alcoa for US$14.05 billion, thwarting a takeover bid for Rio by BHP Billiton, the world's largest mining company.

Xiao said the Rio purchase is out of the development strategy of Chinalco, which is diversifying into other metals to become a globally integrated mining company. "Chinalco is planning to eventually inject assets of other metals to its listed unit, Aluminum Corp of China (Chalco)<601600><2600>, which has all its business related to aluminum at present." Xiao said.

Xiao reiterated the Rio deal will absolutely not be the last one for Chinalco's overseas acquisition, adding that the Corp owns sufficient cash in hand, and will not raise money by selling more shares.

The aluminum producer saw a loss of 13.65% year-on-year in 2007 net profit to RMB 11.84 billion amid the price cut of alumina and the rising production costs.