State-owned Aluminum Corp of China (Chinalco), the biggest single shareholder in Rio Tinto (RIO.AX), is not interested in buying assets being sold by the debt-laden miner, a vice president of the Chinese firm said, quashing market talk of such interest.
The Chinese metals firm, parent of listed aluminium producer Chalco (2600.HK), says the assets being sold by Rio are unrelated to Chinalco's main businesses, Lu Youqing said in an interview.
Rio is selling its borates and talc units in a deal analysts expect to fetch more than $1 billion. [ID:nHKG73912]
Investment in non-business overseas is hard to obtain (government) approval, Lu said, adding Chinalco would study how to better manage its overseas investment projects.
Analysts at several banks had previously said Chinalco was likely to be among Chinese bidders for Rio's assets.
Chinalco, which teamed up with U.S. aluminium firm Alcoa (AA.N) to buy a stake in Rio last year, has said it plans to lift the stake to 14.99 percent.
Chinalco's profits more than halved last year due to weak aluminium and copper prices, Lu said, noting The fall in profits is much bigger than the decline in revenues.
Profits at listed Chalco also fell sharply, Lu said, without giving details.
But Chinalco is holding sufficient cash and is on track to invest in overseas projects, despite the drop in profits, Lu said. Our ability to obtain finances is strong, he added.
In China, Chinalco has already set up a new subsidiary to run copper assets such as Yunnan Copper (000878.SZ), he said.
Asked whether Chinalco would list the new Copper Corporation of China, Lu said: The possibility exists.
Chalco maintains the group's arm to operate its alumina, aluminium and aluminium products businesses in China
Lu confirmed China's State Reserves Bureau had bought 150,000 tonnes of aluminium from the company last month, part of the SRB's 290,000 tonne purchase.
Chinalco continues to keep shut part of its alumina and aluminium capacity, and output resumption would depend on market conditions, Lu said. (Editing by Anshuman Daga)
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