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Change at Chinalco ahead of fresh deal
By Fu Chenghao |
February 10, 2009, Tuesday
|
Print Edition
Print Edition
STATE-RUN Aluminum Corp of China, also known as Chinalco, has appointed former executive Xiong Weiping as president to replace Xiao Yaqing, who led the company's influential acquisition in global mining giant Rio Tinto last year.
The news came as Chinalco and Rio are expected to announce a fresh multi-billion-dollar deal by the Chinese company to buy assets in the debt-laden miner this week.
Xiong's appointment was confirmed yesterday by industry sources but no official announcement has been made yet. A Chinalco spokesman said he wouldn't confirm or deny the appointment.
Led by Xiao, Chinalco, along with United States aluminum maker Alcoa Inc, bought 9 percent in Rio a year earlier to become the Anglo-Australian miner's top shareholder in a deal that had surprised the business world. Chinalco made the 7.2-billion-pound (US$10.7 billion) investment to help the miner diversify into other metals.
To snare the deal, Xiao had flown to London to meet investors and Canberra to secure government support.
The deal was widely seen as a move by China to derail the hostile takeover by BHP Billiton, another global miner, for Rio Tinto. A BHP-Rio alliance would have brought severe implications to China's steel industry as the two would control 38 percent of the seaborne iron ore trade.
The investment has lost about two-thirds of its value following the tumble in metal and share prices. But Chinalco has recently held talks with Rio, which is eager to reduce its debt, about increasing the stake. A deal is expected to be announced on Thursday when Rio is to announce its annual results.
Meanwhile, Rio said its chairman-elect Jim Leng has resigned less than a month after he was named to the position. His resignation has raised the likelihood that a Chinalco-Rio deal is certain as Leng has clashed with Rio Chief Executive Tom Albanese over investment plans by Chinalco, British media reported.
Xiong, currently the general manager of China Travel International Investment Hong Kong Ltd, was the president of Chinalco's listed unit Chalco between 2004 and 2006.
There is market talk that Xiao, also expected to step down as chairman of Chalco which he has led since 2004, may be made deputy secretary general of the State Council, China's Cabinet, but this cannot be verified.
The news came as Chinalco and Rio are expected to announce a fresh multi-billion-dollar deal by the Chinese company to buy assets in the debt-laden miner this week.
Xiong's appointment was confirmed yesterday by industry sources but no official announcement has been made yet. A Chinalco spokesman said he wouldn't confirm or deny the appointment.
Led by Xiao, Chinalco, along with United States aluminum maker Alcoa Inc, bought 9 percent in Rio a year earlier to become the Anglo-Australian miner's top shareholder in a deal that had surprised the business world. Chinalco made the 7.2-billion-pound (US$10.7 billion) investment to help the miner diversify into other metals.
To snare the deal, Xiao had flown to London to meet investors and Canberra to secure government support.
The deal was widely seen as a move by China to derail the hostile takeover by BHP Billiton, another global miner, for Rio Tinto. A BHP-Rio alliance would have brought severe implications to China's steel industry as the two would control 38 percent of the seaborne iron ore trade.
The investment has lost about two-thirds of its value following the tumble in metal and share prices. But Chinalco has recently held talks with Rio, which is eager to reduce its debt, about increasing the stake. A deal is expected to be announced on Thursday when Rio is to announce its annual results.
Meanwhile, Rio said its chairman-elect Jim Leng has resigned less than a month after he was named to the position. His resignation has raised the likelihood that a Chinalco-Rio deal is certain as Leng has clashed with Rio Chief Executive Tom Albanese over investment plans by Chinalco, British media reported.
Xiong, currently the general manager of China Travel International Investment Hong Kong Ltd, was the president of Chinalco's listed unit Chalco between 2004 and 2006.
There is market talk that Xiao, also expected to step down as chairman of Chalco which he has led since 2004, may be made deputy secretary general of the State Council, China's Cabinet, but this cannot be verified.
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