MARKET TALK: Chalco Likely To Rise; Simandou Iron Ore Project

30th Jul 2010 01:28

0028 GMT [Dow Jones] Chalco (2600.HK) likely to rise on resuming trade today, on WSJ report parent Chinalco, Rio Tinto (RIO.AU) seal deal on joint development of Guinea iron-ore project; Chinalco will pay Rio Tinto, which holds 95% of Simandou project, US$1.35 billion through Chalco, over 2-3 years; Chalco will ultimately own 44.65% in project, while Rio Tinto's stake will be 50.35%, with remaining 5% to continue to be held by International Finance Corp. Deal likely taken as transformational for Chalco, as it's outside core alumina, aluminium businesses. Kim Eng says although deal will bring short-term cash pressure, given strong iron ore demand from domestic steel mills, "we view this event as positive and to boost investor's sentiment." Chalco's pre-suspension price HK$6.71. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 29, 2010 20:28 ET (00:28 GMT)