SHANGHAI, Oct. 8 – Aluminum Corporation of China Ltd (Chalco) is transferring a 65% interest in an iron ore venture to its parent Chinalco in a bid to improve its capital structure and financial position.
The 65% interest in Chalco Iron Ore Holdings held by Chalco’s wholly-owned subsidiary Chalco Hong Kong Limited, is being transferred to Chinalco Overseas Holdings, Chalco told Hong Kong Stock Exchange.
Chalco has been disposing some business lines in the past year, gains from which helped it to narrow losses significantly in the first half .
The transfer is subject to agreement from Rio Tinto plc, with whom Chalco partnered to develop Simandou iron ore mining project in Guinea, Chalco said. It is also subject to approvals from the company’s shareholders and Chinese regulators, it added.
Transaction price will be decided after valuation of the iron ore project and negotiations between the two parties, it said.
Rio Tinto and Chalco signed a binding agreement In July 2010 to establish a joint venture covering the development and operation of the Simandou project, believed to be the largest integrated iron ore mine and infrastructure project ever developed in Africa.