2nd UPDATE: Chalco Trading Halt Likely Linked To Simandou Iron Ore Deal

28th Jul 2010 06:57

(Adds industry, source comments on Guinea Simandou iron ore project.) By Chuin-Wei Yap Of DOW JONES NEWSWIRES BEIJING (Dow Jones)--Chinese metals major Aluminum Corp. of China, also known as Chinalco, may be poised to set out formal details of its deal with Anglo-Australian miner Rio Tinto Plc (RTP) on their West African Simandou iron ore joint venture at a signing ceremony Thursday in Beijing, sources and industry analysts said Wednesday. Shares of Chinalco's listed flagship unit, Aluminum Corp. of China Ltd. (ACH) or Chalco, were suspended from trading Wednesday pending discussion of a significant issue. An Australian government source indicated that the Simandou project in Guinea was the subject of the share suspension Wednesday. Chinalco may announce that the joint venture would be assigned on the Chinese side to its listed unit, Chalco, an industry analyst told Dow Jones Newswires. Chinalco executives declined to comment on any aspect of the pending announcement. Chinalco Vice President Lu Youqing said the company is still finalizing details, and declined to elaborate. Asked if the pending announcement would deal with the Simandou project, Rio Tinto spokesman Gervase Greene declined to comment. China's State-owned Assets Supervision and Administration Commission of the State Council last week approved Chinalco changing its statement of core businesses. The move officially added iron ore to its brief, as part of a wider core business that named mined resources, nonferrous metals and mineral resources excluding petroleum and natural gas, the statement said. SASAC's previous statement in 2007 showed Chinalco's core businesses were aluminum, copper and rare earth. A bevy of Chinese government officials are expected to attend Thursday's signing ceremony. They include National Development and Reform Vice Chairman Zhang Xiaoqiang and State-owned Assets Supervision and Administration Commission Vice Chairwoman Huang Danhua, while China's Commerce Minister Chen Deming has also been invited to the ceremony, a senior Chinalco official told Dow Jones Newswires Wednesday. The signing ceremony will take place at the Great Hall of the People on Thursday afternoon, according to an invitation received by Dow Jones Newswires. The invitation referred to "Chinalco Project Cooperation Agreement Signing Ceremony," without giving any other detail. Trading in Chalco shares was halted on the Shanghai and Hong Kong stock exchanges Wednesday as the company is discussing a "significant issue," according to a company statement. Chalco said its shares will likely resume trading in Shanghai on Friday. Its yuan-denominated A-shares have risen nearly 14% in the past seven sessions. Chinalco, the country's largest producer of alumina and aluminum, is also the largest shareholder in Rio Tinto. The two companies had announced a $1.35 billion development deal for Simandou in March. (Amy Li and Yue Li in Shanghai and Yajun Zhang in Beijing contributed to this article.) -By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848; [email protected] (END) Dow Jones Newswires July 28, 2010 01:57 ET (05:57 GMT)