Chalco, COSCO Group become strategic partners

May 12, 2009 (China Knowledge) - Aluminum Corp of China Ltd (Chalco)<601600><2600><ACH>, the nation's largest aluminum producer, yesterday in Beijing signed a strategic cooperation agreement with China Ocean Shipping Co (COSCO Group), the country's largest shipping and logistics service provider, the official Xinhua News reported.

Under the terms of the agreement, COSCO Group will provide maritime transport and logistics services to Chalco. Chalco will grant COSCO Group priority to ship its imported and exported products.

Both Chalco and COSCO Group hope to benefit by enhancing their competitive strengths through the cooperation so as to weather in the ongoing global financial crisis.

In fact, the Chinese government is implementing stimulus policies for the country's nonferrous metals industry by consolidating nonferrous metals firms in order to create industry giants.

As part of the government's plan, China will not approve new aluminum plants or expansion projects in the next three years. Hence, Chalco's aluminum expansion project in Pingguo in Guangxi Zhuang Autonomous Region is still pending, said the company's Guangxi head.

If the expansion of this aluminum project could be implemented, Chalco's aluminum plant in Pingguo would have an annual production capacity of 250,000 tons, whereas currently its capacity is 140,000 tons.