Chalco makes Jan-Feb profit, sees strong year

* China 2010 aluminium consumption to rise 2.5 pct - Chalco

* Global 2010 aluminium consumption to rise 5.6 pct - Chalco

* Chalco to increase alumina output by over a third this year

By Rujun Shen and Edmund Klamann

SHANGHAI, March 29 (Reuters) - Aluminum Corp of China Ltd , the world's most valuable aluminium company, returned to profit in January-February and predicted a year of soaring revenues as economies recover and sectors such as real estate and transport drive aluminium consumption.

Late last week, Chalco, as the company is better known, posted a surprise fourth-quarter loss, as higher costs more than offset rising metals prices.

"In 2010, the global economy will continue to recover and China's economy (will) stage steady growth,” Chairman and CEO Xiong Weiping said on Monday. “The fast development of real estate and transport, which consume more than 50 percent of aluminium, will boost consumption.”

"This year, revenues of the company are expected to rise greatly and earnings to show remarkable improvement.”

Chalco expects China to consume 16.5 million tonnes of aluminium in 2010, up from 16.11 million tonnes in 2009, while global consumption of the metal should increase to 41.6 million tonnes from 39.41 million tonnes.

Chalco plans to increase its alumina output this year by more than a third from 2009's 7.78 million tonnes, and push up its aluminium output by more than 15 percent from 3.44 million tonnes. 

Xiong predicted aluminium prices would fluctuate between $2,000-$2,400 a tonne in the world market and 15,500-18,000 yuan a tonne in the domestic Chinese market.

Chalco still faces serious challenges this year, including rising prices of bauxite, other raw materials and power tariffs, Xiong added.

SEEKING OVERSEAS OPPORTUNITIES

The company is looking at ways to develop bauxite mines and build large alumina and aluminium plants overseas.

“Chalco will selectively participate and push for development of (bauxite) exploration and mining projects with potential in neighbouring countries, to secure overseas supply,” Xiong told reporters.

The company has a framework agreement to build an aluminium plant with annual capacity of 330,000 tonnes in Malaysia, with a total estimated investment of $1 billion.

Chinalco, Chalco's parent, said earlier this month it signed a $2.9 billion agreement with miner Rio Tinto   to jointly develop an iron ore project in Guinea.

Chalco is also looking to push into coal and hydropower resources to complete the aluminium production chain and reduce its energy costs.

"New aluminium capacity will be increasingly located in coal-rich regions as well as areas with plenty of hydropower,” Xiong said.

China's southwestern region, traditionally rich in hydropower, is suffering from a severe drought that has blighted the lives of millions. But Liu Xiangming, Chalco vice president, said the company's operations in the region were unaffected by the drought.

Chalco is seeking licenses to explore and mine coal resources in Gansu and Qinghai provinces.

Chalco's shares were trading 0.6 percent lower by 0455 GMT on Monday in a benchmark Hong Kong index that was up 0.8 percent.

(Additional reporting by Li Hongwei, Editing by Ian Geoghegan)