(Yicai Global) May 28 -- Aluminum Corporation of China, Chinalco, and the provincial government in southwestern China's Yunnan province will initiate large-scale cooperation in a move that will mark China's largest state-owned aluminum producer's entry into the country's southern market in search for access to the region's smelting capacity.
Both sides signed a cooperation agreement yesterday planning to take the latter's wholly-owned subsidiary as a joint platform. Yunnan Metallurgical Group will be merged into a joint venture with Chinalco, according to a statement today from Yunnan Metallurgical's listed units, Yunnan Chihong Zinc & Germanium and Yunnan Aluminium.
As China cracks down on coal-fired power, aluminum companies seek alternative sources and head south due to its rich hydropower resources.
The collaboration between the Yunnan provincial government and Chinalco includes, but is not limited to, capital increase and transfer, it said.
The Yunnan branch of State-owned Assets Supervision and Administration Commission, SASAC, and Chinalco signed Agreement on the Management of Yunnan Metallurgical Group. After the cooperation, Chinalco and the Yunnan provincial government will respectively hold 58 percent and 42 percent stakes in the joint venture.
If the above cooperation proves to be successful, the actual controller of Chihong Zinc & Germanium and Yunnan Aluminum will change hands from Yunnan SASAC to SASAC of the State Council, the statement added.
In the first quarter of 2018, Yunnan Copper's net profit attributable to shareholders of the listed company reached CNY118 million (USD18.5 million), a year-on-year increase of nearly 76 percent. Yunnan Aluminum's first-quarter net profit attributable to shareholders of the listed company slumped by nearly three times year-on-year, while that of Chihong Zinc & Germanium increased by 3 percent annually, shows public information.
Editor: Mevlut Kati