China's Chalco says loss expected in Q1

Chinese aluminium giant Chalco said Monday it expected to post a loss for the first quarter of the year, after net profit all but disappeared in 2008 in the face of the global economic slowdown.

Chalco, the world's largest aluminium company firm by market value, said net profits dropped to 9.2 million yuan (1.3 million dollars), down from 10.75 billion yuan the previous year.

"Aluminium product prices slumped while fuel costs rose. Our group faced unprecedented difficulties and challenges," company president Luo Jianchuan told a news conference.

Luo said the company had already shut down 40 percent of alumina production and 24 percent of aluminium capacity while it ran down its high-cost raw material inventory.

He said it could restart some of that production in the second half once demand recovered. The company said it faced "an exceptionally challenging business landscape" ahead.

Chalco's parent company Chinalco is awaiting Australian government approval for a 19.5-billion-dollar offer to double its stake in mining giant Rio Tinto to 18 percent.

Australia's competition watchdog said last week it would not block Chinalco's investment in Rio Tinto. But the Australian government is still examining it under foreign investment review laws.

Luo said the company did not expect the Rio Tinto deal to be affected by Australia's surprise rejection last week of a bid by state-owned Chinese firm Minmetals bid to buy Australian miner OZ Minerals.

"There has been little impact so far," Luo told reporters after the briefing. "Our (government review) procedure is under control and running well."

Chalco also said its chairman, Xiao Yaqing, had resigned from this post after being named deputy secretary general of China's State Council, or cabinet, last week.

Xiao said he would step down as chief executive and executive director after the company's annual general meeting on May 26.

Xiao, who was also president of Chinalco, was succeeded in that role by Xiong Weiping in February. Xiong has been nominated as a candidate for the executive-director position being vacated by Xiao, Chalco said.

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