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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (17618)	4/11/2008 9:28:52 PM
From: LoneClone	Read Replies (1) \| Respond to of 193918

Chinese want a bigger say over copper theaustralian.news.com.au Kevin Andrusiak and Andrew Trounson \| April 12, 2008 CHINESE aluminium giant Chinalco has given the first clear indication that it plans to use its majority shareholding in Rio Tinto to push for greater leverage in the world copper market. Deng Gang, senior business manager at Chinalco's listed subsidiary Chalco, said Chinalco wanted to be taken seriously as a world-class multi-metal mining company. State-owned Chinalco stunned the world in February when it teamed with a junior partner, US-based Alcoa, in paying $15billion to buy a 9 per cent stake in the dual-listed mining giant Rio. There is speculation that Beijing is considering backing a similar share raid on BHP, which would provide even further copper leverage for whatever state-owned enterprise was to lead such a raid. Australia's Foreign Investment Review Board is considering whether to approve Chinalco's investment in Rio amid a rising debate over whether significant Chinese Government-backed control of Australian resources would threaten the national interest. Chinalco palmed off suggestions at the time that the lightning share raid was a strategic ploy to derail BHP Billiton's bid for Rio, instead claiming that it was just a strategic investment. It has since said it is more likely to increase its stake than sell out. But so far the partners have lost about 5 per cent in the investment after buying the Rio shares at pound stg. 60 a share on the London Stock Exchange. Melbourne-based BHP's chairman Don Argus has represented the company as Australia's national resources champion. And amid speculation that Beijing may be seeking to block the merger, BHP will be keen to convince the federal Government that the merger would be in the national interest. Mr Deng declined to comment about Chinalco increasing its stake in Rio when approached by The Weekend Australian at the World Copper Conference in Chile, suggesting only that the relationship between the two was in the development phase. Mr Deng said Chinalco's initial focus would be to acquire copper producers in Chile and elsewhere, with reports that it has a war chest of up to $US4 billion to spend. Late last year, the company pulled out of a deal to be the cornerstone investor in the failed $500 million listing of Ivanhoe's Australian exploration assets near Mt Isa. He added that the 9 per cent stake in Rio was a key step forward for globalisation as the company sought to improve its international influence. The stake "gives Chinalco the right of say and strength of obtaining copper resources in the world," Mr Deng said. China's "dependency on overseas resources (for copper) is very serious". Chinalco wants to increase its copper smelting capacity to 1.5 million tonnes a year by 2010 and has also signalled its intentions to become involved in the rare earths sector along the way. Total smelting capacity in China currently stands at 4.2 million tonnes. China overtook the US in 2002 as the world's biggest consumer of copper and accounts for about 26 per cent of total global consumption. Per capita consumption in China is also still very low compared with the rest of the world, with latest statistics showing an average consumption of 2.8kg per person versus 10-20kg per person for the rest of the developed world. Yet the emerging economic powerhouse produces only 850,000 tonnes of copper concentrate a year and has to import about 4.5 million tonnes annually, with spot price deliveries accounting for 80 per cent of all imports. "We are a newcomer to the copper community but we take a long-term view," Mr Deng said. "We will consume more and more copper. Copper shortages (in China) will exist for a long time," he said.