Mineral Demand in China
China consumed 7 million tons of alumina in 2005, a figure that Chalco president Xiao Yaqing Xiao says could increase 20 per cent by 2010.
Vaughan Wickins, an analyst with Standard Bank London, has said that to meet this increasing level of demand, Chinese companies must start gaining control of substantial deposits of bauxite.
Australia is “an obvious target,” says Greg Dean-Jones, an analyst at AME Mineral Economics. Chalco’s involvement in the Aurukun project will double its bauxite reserves.
In order to get access to yet more minerals, Chalco’s parent company, Chinalco, has recently teamed up with Alcoa, a major U.S. aluminum producer, to purchase a 9 per cent interest in Rio Tinto, the world's biggest mining company, for US$14.5 billion.
A merger of the two mining giants would ensure that the company would also control almost 40 per cent of the world’s iron ore, another raw material for which China has a huge appetite. As stated by Xiao, “In times of stock market decline and lower assets prices, it’s time for good and strong companies to look for opportunities.”
And Chinese companies are starting to go beyond investment and buying stakes in foreign companies. For example, in March, Chinese iron ore company Sinosteel launched a hostile takeover bid for Midwest, a West Australian iron ore mining company. The Export-Import Bank of China is financing the bid, under the guidance of China’s State Council.
http://www.corpwatch.org/article.php?id=15011
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