Bosai Minerals Group to Buy Rio Tinto's Ghana Bauxite Stake

BEIJING, Feb. 4 -- Bosai Minerals Group Co Ltd, a privately-owned group mainly involved in alumina, aluminum, calcined bauxite and coal, announced today that its plan to acquire Rio Tinto's 80% stake in Ghana Bauxite Co has won approval from the Chinese government.

According to Bosai Minerals, which paid US$30 million for the aluminum ore asset, Ghana Bauxite's mine has proven reserves of 100 million tons. Taking into account the cost of extraction and the market price of bauxite, Bosai Minerals expects to see a net profit of US$5 per ton from the bauxite ore.

The company plans to invest over RMB 3.5 billion to set up an alumina plant with an annual production capacity of 1 million tons by 2013. In fact, the Chongqing-based company is planning to build a complete aluminum industry chain in Ghana. To achieve this goal, it intends to acquire a closed electrolytic aluminum plant with an annual production capacity of 200,000 tons.

Yuan Zhilun, president of Bosai Minerals, said the company also plans to ship over 500,000 tons of bauxite ore back to Chongqing per year, which will ease domestic shortages.

The company is reportedly considering whether to expand the production capacity of its alumina plant in Nanchuan from 600,000 tons to 1 million tons or to buy another plant.