Alcoa seeking Sichuan aluminum smelter

Interfax China reported that US based Alcoa Inc is in acquisition talks with Panzhihua Pearl Aluminum Co Ltd an aluminum smelter in China's southwestern Sichuan Province with an annual output of 50,000 tonnes.

An official with the foreign investment department of the Panzhihua City government said that "Alcoa wishes to acquire a controlling stake in Panzhihua Pearl Aluminum, and the two companies have recently reached some initial agreements on the acquisition."

According to the official, a delegate of Alcoa visited Panzhihua Pearl Aluminum last week and held talks with the company and local government officials to discuss the possibility of a merger.

The project which is located in the Vanadium and Titanium Hi-tech Zone, in Panzhihua City, Panzhihua Pearl Aluminum commenced operation of a 50,000 tonne aluminum smelting project in April this year.

According to the official the project represents the first phase of a two phase project, which is to have an annual production capacity to 100,000 tonnes of primary aluminum.

According to Panzhihua government information the company suspended construction on the first-phase 50,000 ton project in 2003 due to funding problems, after staring construction in early 2002. The two phase 100,000 tonne project requires total investment of CNY 1.2 billion.

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