(Yicai Global) Aug. 10 -- Tianshan Aluminum Group’s shares climbed after the Chinese manufacturer of aluminum products said it has agreed to buy a 49 percent stake in an Indonesian mining holding company.

The company’s shares [SHE:002532] closed 5.1 percent higher today at CNY9.84 (USD1.52), giving it a CNY39.6 billion (USD6.1 billion) market cap.

Tianshan Aluminum will launch due diligence as soon as possible and will pay USD3 million up front, it said in a statement this morning. The final cost of the acquisition will be based on the estimated value of the target firms' bauxite in three mines.

The Indonesian company owns 100 percent of three miners in the country and has three certificates granted by the government to exploit local mineral resources. The mines are also located in areas with convenient access to water.

Buying bauxite assets in Indonesia, one of the world’s major producers and exporters of the rock containing aluminum and gallium, will be conducive to extending Tianshan Aluminum’s industry chain and consolidating its raw materials supply, the firm said. 

Tianshan Aluminum’s net profit tripled to CNY2 billion (USD308.6 million) in the first half of this year from the same period of 2020, according to its earnings report published late yesterday. Revenue jumped 24 percent to CNY14.7 billion (USD2.7 billion) thanks to a 32 percent gain in aluminum ingot prices.

Editor: Tom Litting