SHANGHAI--China's second largest aluminum producer Qingtongxia Aluminum Co. has received approval from the Chinese government to develop an alumina production plant in India with Indian minerals producer Ashapura Minechem Ltd. (527001.BY), said a top Qingtongxia Aluminum official Tuesday.
The project, which has an annual alumina production capacity of 1 million metric tons, is the Chinese company's first investment in alumina, the key raw material used in the making of aluminum.
The joint-venture plant located in Gujarat province will manufacture alumina using bauxite from Ashapura's mines, and the alumina will be shipped to China for Qingtongxia to produce aluminum, said the official, who declined to be named.
"We don't have (aluminum capacity) expansion plans for this year...(the Indian plant) is all about (lowering) production costs, he said.
The official said Qingtongxia holds a 50% stake in the joint venture, while Ashapura owns the remaining part, but he declined to provide more details about the project, saying many specifics were still pending.
China's Sichuan Aostar Aluminum Co. was initially involved in the project, but later withdrew.
"At the moment, we aren't holding talks with Glencore, or other foreign investors, for any kind of cooperation," the Qingtongxia official said.
Switzerland-based commodities trader Glencore International AG (GNC.YY) said it August signed a memorandum of understanding with Qingtongxia Aluminum, and will take a stake in the company.
Qingtongxia Aluminum has a separate joint venture with Alcan Inc. (AL.T) for an aluminum plant in Ningxia Hui Autonomous Region.
It said on its Web site that its total aluminum production capacity will rise to 700,000 tons by the end of 2010.
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