Shares in Chalco are suspended as deal with Rio nears
Shares in Aluminium Corp of China (Chalco) were suspended yesterday, as a deal with Rio Tinto is expected to be finalised by this morning.
Chalco shares stopped trading in both Shanghai and Hong Kong as the company said it was “discussing important issues”, according to announcements in both markets.
A signing ceremony will be held in Beijing to finalise a deal – expected to involve an agreement over an iron-ore project in the Simandou region of Guinea.
The two firms signed a non-binding $2.9bn (£1.9bn) pact in March to jointly develop the iron ore mine in Simandou.
Under that deal, Chinalco – Chalco’s parent company – was due to pay Rio $1.35bn over two years to take up its 44.65 per cent stake.
Rio has been considering whether to sell its interest in the area to its Chinese partner after experiencing difficulties with the project.
Half of its rights to develop the area were granted to rival BSG Resources after the Guinea government accused Rio of not moving quickly enough.
Chalco told investors shares would resume trading tomorrow.
Chinalco holds a stake of around nine per cent in Rio. It had a proposal to buy an even bigger slice of the firm rejected last year.
Spokesmen from both Chinalco and Rio Tinto both declined to comment.