Posted on 11/07/2001 12:13:37 AM PST by American_Patriot_For_Democracy
NEW YORK, Nov 6 (Reuters) - A 50/50 joint venture between Pittsburgh-based Alcoa Inc. (NYSE:AA - news), the world's top aluminum producer, and Aluminum Corp. of China Ltd (Chalco) will more than double alumina and aluminum output at Chalco's Pingguo, China, operations by 2006, Alcoa said on Tuesday.
Terms of the deal were not disclosed.
The companies announced Tuesday the alliance at the refining and smelting plants in Guangxi Province. China's aluminum market is considered the fastest growing in the world.
Alcoa said, with the venture, Pingguo's current alumina refining capacity of 400,000 tonnes per year is expected to double by 2003. Capacity at the adjacent 135,000-tonnes aluminum smelter will rise by 220,000 tonnes to 355,000 tonnes by 2006.
``We expect our alliance to lead to a series of joint ventures in China where the mutual strategic objectives of Alcoa and Chalco can be realized through the combination of each company's respective resources and strengths,'' Alain Belda, Alcoa's chairman and chief executive, said in a statement.
Alcoa did not disclose the amount of its investment but said an offshore subsidiary, Alcoa International (Asia) Ltd., will own 8 percent of the shares in Chalco's $300 million to $500 million initial public offering, as well as a board seat.
The companies said the IPO would launch on November 19 with 90 percent of the shares to be floated in New York and the rest in Hong Kong. Pricing is scheduled for Dec. 5 in New York and Dec. 3-5 in Hong Kong.
Final negotiations for the venture, subject to clearance by regulatory authorities in China, should be completed by the end of 2002, Alcoa said.
Belda added that Alcoa's involvement in producing primary aluminum in China would also support its further growth in fabricated products there.
Alcoa said it will also provide managerial, operational and technical expertise to Chalco under the strategic alliance.
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