Chalco Expects Bauxite Self-Supply Ratio to Reach 60% in 2009

Hong Kong (Dow Jones) - Aluminum Corp. of China Ltd. (ACH), known as Chalco, said it will boost its self-supply ratio of bauxite to 60% by the end of 2009 from the current 35% in order to ensure stable raw material amid raising alumina prduction, Chief Financial Officer Chen Jihua told Analysts in a telephone conference.

The Beijing-based Chalco said it plans to increase its alumina production capacity to 13 million metric tons by the end of 2010, up from an estimated 10.2 million tons by year end.

Bauxite is the raw material used in the production of aluminum.

Chen said Chalco's average alumina price slumped 25% on year to CNY3.035 per ton for the third quarter ended September, while the aluminum price was maintained at 19,931/ton during the same period.

In September, Chalco cut the spot price of its alumina to CNY3,500-4,000/ton in the fourth quarter.

Chalco, China's largest alumina and aluminum producer by output, said late Monday that its net profit for the third quarter ended Sep. 30 was CNY2.04 billion, while net profit for the January-September period totaled CNY8.44 billion.

It did not provide any figures for the previous year.

JP Morgan said in research notes that Chalco's third quarter results were weaker than expected due to higher alumina production costs, such as heavy oil, coal and bauxite costs.

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