Chinalco says has restarted most idle capacity

Aluminum Corporation of China (Chinalco), the parent of Chalco (2600.HK) (601600.SS) and the country's top producer of the metal, has restarted most of its idle capacity of alumina and primary aluminium, according to a company presentation prepared for a conference on Friday.

As of end-October, 90 percent of Chinalco's total alumina capacity and 88 percent of its primary aluminium capacity in China was operating, the presentation said.

Chalco is the operator of Chinalco's production of aluminium and of alumina, the main raw material for producing the metal.

Chalco's president Luo Jianchuan said in late August that the company was operating 67 percent of total alumina capacity and 83 percent of total primary aluminium capacity. It has about 11 million tonnes of annual alumina capacity and 4 million tonnes of primary aluminium capacity. [ID:nSHA49732]

Chinalco has been posting operating profits since August following cost-cutting measures and losses earlier in the year, the presentation said.

Under the measures, Chinalco cut the value of its inventories by 4.73 billion yuan and reduced expenses by 790 million yuan in the first ten months of this year, it said, without providing types of inventories.

Chinalco expects this year's investment plan to be cut by 3.38 billion yuan ($495.1 million). In the first ten months of the year, the firm completed investment of 10.7 billion yuan ($1.57 billion).

In the first ten months of the year, Chinalco added holdings of 53 million tonnes of bauxite reserves and 3 million tonnes of copper reserves, one of Chinalco's fastest-developing businesses after aluminium.

But Chinalco's market share has fallen to 38 percent in the domestic alumina market and to 27 percent in China's aluminium market as local competitors, run by private and provincial-controlled companies, have increased capacity.

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