Chinalco not interested in Rio Tinto units

 vice president of Aluminum Corp. of China, the biggest single shareholder in Rio Tinto, said Monday that his company was not interested in buying assets being sold by Rio Tinto, quashing market talk of such interest.

Aluminum Corp. of China, also known as Chinalco, is the parent of Aluminum Corp. of China Ltd., or Chalco, a listed aluminum producer. The company believes that the assets being sold by Rio Tinto are unrelated to Chinalco's main businesses, the executive, Lu Youqing, said in an interview.

Rio Tinto is selling its borates and talc units in a deal analysts expect to fetch more than $1 billion.

It would be hard to obtain government approval for such a deal, Lu said, adding that Chinalco would study how to manage its overseas investment projects better.

Analysts at several banks said previously that Chinalco was likely to be among the Chinese bidders for Rio Tinto's assets. Chinalco, which together with the American aluminum company Alcoa bought a 12 percent stake in Rio last year for $14 billion, has said it plans to lift the Rio stake to 14.99 percent.

Chinalco's profits fell by more than half last year because of weak aluminum and copper prices, Lu said, adding, "The fall in profits is much bigger than the decline in revenues."

Profit at Chalco also fell sharply, Lu said, without giving details.

But Chinalco is holding sufficient cash and is on track to invest in overseas projects, despite the drop in profits, Lu said.

In China, Chinalco has already set up a subsidiary to run copper assets like Yunnan Copper, he added. "Our ability to obtain finances is strong," he said.

Asked whether Chinalco would list the subsidiary, Copper Corp. of China, Lu said, "The possibility exists."

Lu confirmed that China's State Reserves Bureau had bought 150,000 tons of aluminum from the company last month.

Chinalco continues to keep part of its alumina and aluminum capacity shut down, and output resumption will depend on market conditions, Lu said.

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