Aluminium Corp of China (Chinalco) is in talks to buy a stake in Yunnan Copper, the country's third-largest copper producer, for $121 million, state media and government officials said Monday. The companies had begun discussions in the second half of 2004 but details had yet to be finalised, the Economic Observer cited a provincial government official as saying.
The Beijing-based newspaper also cited a Chinalco executive as saying the purchase price would exceed 1 billion yuan ($120 million).
"They are still talking, but nothing has been decided so far," an official with the State-owned Assets Supervision and Administration Commission in south-western Yunnan province told Reuters. He declined to comment further.
The commission is one of the biggest shareholders in Yunnan Copper Group, the state parent of Yunnan Copper.
Yunnan's government would require Chinalco, parent of Hong Kong-listed Aluminium Corp of China Ltd, to build one alumina refinery in the province as a precondition for the purchase, the paper added.
Officials at Chinalco and Yunnan Copper declined to comment.
Chinalco, the country's largest aluminium producer, is expanding its holdings in other metals. Last year it took a majority state in Daye Non-ferrous Metals Co, the country's fourth-largest copper producer.
China is short of copper to feed its rapid economic growth. Net imports in 2004 exceeded 1.2 million tonnes.
Chinalco has also approached the government of the southern region of Guangxi to buy a stake in Liuzhou China Tin, the country's second largest producer of the metal.