No slowing the Chinese dragon

"We've been thinking about whether we can extend our operations into the downstream," the chairman of China's largest aluminium producer, Xiao Yaqing said during a recent interview with BusinessDaily at the company's Beijing headquarters.

This could potentially include using clean coal technology to produce low-carbon power to support an aluminium smelter.

"Our broad direction is downstream. However, we will evaluate all sorts of investment opportunities," he said.

The size of any new investment would depend on its ability to generate profits and the willingness of financiers to lend money, Mr Xiao said through an interpreter.

"If they can provide us with finance, we can surely invest with a large amount of money," he said.

But the first priority of the company, whose parent, Chinalco and US aluminium producer Alcoa jointly bought a 12 per cent stake in Rio Tinto early this year, is completing its $40 million dollar feasibility study into a bauxite mine, plant and port at Aurukun and an alumina refinery at an as-yet unnamed Queensland port, but probably Bowen.

He said Chalco's definition of of good investment was that "first of all it should generate good returns".

Chalco is a majority state owned company but also has shares listed on the Hong Kong, New York and Shanghai stock exchange, which means the company is "accountable to our shareholders", Mr Xiao said.

"If there is no commercial return, then it is not possible for us."

Mr Xiao said he recognised Australians were sensitive to connections between Chinese state-owned companies and their companies.

But he believes more government-to-government communications would "help Australians to understand conditions in China.'

"In a competitive industry like the mining industry, where Chinalco operates, the government is only a shareholder.

''It does not interfere in the day-to-day operations of our company," Mr Xiao said.

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