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​Chinalco cooperates with the Yunnan Metallurgical Group

www.cfbond.com
2018-05-30 10:37

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The Aluminum Corporation of China (Chinalco) finalized its strategic cooperation with the Yunnan Metallurgical Group, as reported by the Shanghai Securities News on Tuesday.

Chinalco’s subsidiary, the Yunnan Copper (Group) Corporation and the Yunnan Metallurgical Group’s subsidiaries, the Yunnan Aluminum Corporation and the Yunnan Chihong Zn&Ge Corporation will be merged, which is the largest reorganization in the Chinese nonferrous metals industry.

The Yunnan Aluminum Corporation and the Yunnan Chihong Zn&Ge Corporation will be incorporated into Chinalco and be upgraded from local state-owned enterprises to become a central state-owned enterprise.

Chinalco and the Yunnan provincial government will use Chinalco’s wholly-owned subsidiary, the China Copper Limited Corporation as a platform, and will hold 58 percent and 42 percent shares in the China Copper Limited Corporation, respectively.

There was a rumor that Chinalco would be incorporated into the China Minmetals Corporation or the China Nonferrous Metal Mining (Group) Corporation. An expert believed that it is unlikely that Chinalco would merge with other central state-owned enterprises. But the competition between Chinalco and other central state-owned enterprises in the nonferrous metals industry will be stronger.

Yunnan Province owns abundant mineral resources. Chinalco is a leading company in the nonferrous metals industry. The cooperation between the two parties will achieve a stronger alliance, complement each other’s advantages and promote industrial upgrading and economic development in Yunnan.

Zhou Lisha, a research associate from the Research Center of the Stated-owned Assets Supervision and Administration Commission of the State Council, suggested that this reorganization will gather resources in the superior companies and increase the level of industry concentration.

An insider analyzed the impact of cutting overcapacity on electrolytic aluminum and believed that the supply-side reform was now in an optimization phase.

After the reorganization, the Yunnan Copper (Group) Corporation will be expected to gain important opportunities to develop. Zhou stated that Chinalco could enhance its discourse power in the world’s nonferrous metal resources and products through the China Copper Limited Corporation in Yunnan.
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