Chalco enters into a joint venture with Chinalco, Yunnan Copper & other partners

Chalco, a major global producer of alumina and aluminium, has recently announced that it has entered into a capital contribution agreement with Yunnan Copper, Chihong Zinc & Germanium, and Chalco Capital. According to the contract, all the participants have agreed to contribute capital for the joint venture for developing downstream rare metal industries. Chalco is one of China’s largest aluminium producers and as a key subsidiary of Chinalco Group.

This joint venture would serve as an extended platform for the Chalco Group’s rare metals industrial chain. Through this agreement, Chalco is expanding beyond primary aluminium into rare metals to produce high-end rare metal products. It would help to focus on the downstream industries of rare metals, along with the promotion and development of end products of rare materials. It would enable the company to achieve its long-term strategic plan to leverage the capabilities of  Chalco Group’s resources to gain a dominant position in the field of rare metal materials.

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As per the agreement, the total registered capital of the new joint venture is about RMB 1.5 billion (USD 0.2 billion), taking into consideration all the contribution amounts of the partners. The equity structure  of each partners within the joint venture is in the given manner,

• Chalco Group will hold 25 per cent
•  Chalco (the company) will hold 20 per cent 
• Yunnan Copper will hold 20 per cent, 
• Chihong Zinc & Germanium will hold 20 per cent
• Chalco Capital will hold 15 per cent

Chalco Group and its subsequent single listed company, Chalco, would be contributing RMB 375 million (USD 52.8 million)  and RMB 300 million (USD 42.2 million), respectively. This joint venture will not be considered as a subsidiary of Chalco Company, and its financial outcomes will not be considered in the company’s accounts. This collaboration would ensure the effective utilisation of the resources to obtain its goals while mitigating the risk factors.

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