CORRECT: Chinalco Talking To Rio Tinto On Mongolia Copper, Gold Project

Aluminum Corp. of China, or Chinalco, seeks to develop more global strategic partnerships in the mining sector, and is currently in talks with Anglo-Australian miner Rio Tinto Ltd. (RTP) about the joint development of a massive copper and gold mine in Mongolia, Executive Director Liu Xiangmin said Tuesday.

"Chinese enterprises cooperating overseas in resources and energy are an integral part of mining globalization," he said on the sidelines of a mining conference.

Liu's comments followed by one day comments made by Rio Tinto Chief Executive Tom Albanese, who expressed regret over a lost opportunity to deepen ties with Chinalco last year and optimism over a joint development deal with the Chinese company to develop an iron ore mine in Guinea.

The recent deals between Rio Tinto and Chinalco highlight warming ties between the two mining giants in the wake of Chinalco's failed $19.5 billion bid for equity in the Anglo-Australian miner last February and the arrest in China later last year of Rio Tinto executives on bribery and other charges. The current round of warming is playing out even as Rio Tinto employees go on trial in a Shanghai court.

With a $15.5 billion investment for around a 9% stake, Chinalco is already the single biggest shareholder in Rio Tinto, which owns a 22.4% stake in Ivanhoe Mines Ltd. (IVN.T), the Canadian company that is developing the Oyu Tolgoi copper and gold project in Mongolia.

Rio's Albanese, speaking at the China Development Forum in Beijing, offered to share expertise in future projects to help China mine domestic mineral resources.

Liu said Tuesday that the exit of speculative capital and inflation expectations are expected to affect mining operations worldwide--and this could lead to short-term price fluctuations.

However, Chinalco, which currently has daily mining capacity of 100,000 metric tons, is seeking to raise this to 250,000 tons. Liu--vice president at Chinalco's listed unit, Aluminum Corp. of China Ltd. (ACH), or Chalco--didn't specify the timeframe over which this expansion will be achieved.

China is Rio Tinto's largest iron ore buyer. Meanwhile, China has provided Rio Tinto with important products, including rail cars to transport iron ore from mines to ports, Albanese said Monday.

Rio Tinto intends to spend US$400 million on similar ore car purchases from China, he added.

-By Denny Kurien, Dow Jones Newswires; +(65) 9272-8562; denny.kurien@dowjones.com

(Helen Sun in Singapore and Chuin-Wei Yap in Beijing contributed to this article)

Ivanhoe Mines (NYSE:IVN)
Historical Stock Chart
From Jun 2024 to Jul 2024