Aluminum Corp of China Ltd (Chalco), the nation's biggest maker of the metal, said it will raise 5 billion yuan by selling bonds of more than one year maturity to fund expansion.

 

The company will seek shareholder approval for the sale at a meeting on February 27, it said in a statement yesterday to the Hong Kong stock exchange.

 

Chalco said the bond issue will help ensure lower financing costs, with the proceeds to be used to fund major aluminum refining and smelting projects.

 

Last December Chalco offered an 8.17 billion yuan stock swap for remaining shares it does not own in Shanghai-listed Lanzhou Aluminum Co and Shandong Aluminum Industry Co.

 

The company plans to list on the domestic stock market and is awaiting regulatory approval, said its Vice-President Lu Youqing.

 

In 2006 Chalco's parent, Aluminum Corp of China recorded 22.5 billion yuan in net profit, an increase of 18.1 billion yuan over its profit posted three years ago.

 

Its sales revenue was 105.5 billion yuan in 2006, an increase of 74.5 billion yuan compared with 2003.

 

The company's output of alumina, a raw material for making aluminum and abrasives, increased 59 percent over 2003, while finished aluminum showed 208 percent growth in the same period.

 

Production of alumina has accounted for about 60 percent of the company's profit, said Lu, adding that the producer will increase its alumina output by opening new manufacturing facilities.

 

In 2006 it started two alumina plants, one in Chongqing Municipality and another in Zunyi in Southwest China's Guizhou Province. This year it will build another new alumina plant in North China's Shanxi Province.

 

Earlier this month Chalco said it had raised the alumina price 50 percent due to surging demand from consuming industries.

 

The price of the raw material increased to 3,600 yuan per ton.

 

(China Daily February 13, 2007)