Aluminum Corporation of China (Chinalco), the nation's biggest aluminium and alumina producer, will build a large alumina mining project with Viet Nam in the alumina-rich Southeast Asian country.

Sources from the State-owned Chinalco said total investment in the planned alumina project will be more than US$1 billion.

Chinalco will foot most of the bill and will be responsible for technology development and production.

China Nonferrous Metal Mining and Construction Group and a Chinese railway construction firm will also participate in building the mining project, sources said.

The National Development and Reform Commission, China's main industry watchdog, has signed an agreement with the Vietnamese Government.

"We will complete the feasibility study for the project within nine months," a source with Chinalco said.But no details have been unveiled.

Sources said Chinalco is also seeking to build alumina bases in Guinea and Australia.

There are more than 10 planned alumina exploration projects in foreign countries, including Australia, Guinea, Viet Nam, India, Brazil and Jamaica, according to the China Nonferrous Metal Industry Association.

"We have to accelerate overseas exploration because the existing alumina reserves in China will not be able to meet domestic demand within the next two decades," said Pan Jiazhu, vice-president of the association.

China has a total alumina reserve of 506 million tons, compared with 16 billion tons in Guinea, 12 billion tons in Australia, 9 billion tons in Brazil, 8 billion tons in Viet Nam and 420 million tons in Jamaica.

China's alumina imports are increasing as a result of a short supply on the domestic market.

The nation imported some 5.5 million tons of alumina last year, up from 4.57 million tons in 2002.

Chinalco said its alumina output reached 6 million tons this year, up 10.91 per cent from a year earlier.

The company produced 960,000 tons of aluminium last year, an increase of 8.21 per cent from 2002.

The company said it will continue to put the priority on alumina, which is raw material for aluminium, next year to stabilize the domestic market.

The average price of Chinalco's alumina stood at 3,700 yuan (US$447) per ton last year, down from 4,300 yuan (US$519) of the imported.

Boosted by China's steady economic growth, domestic aluminium demand will increase to 8.8 million tons by 2010 and to 14.3 million tons by 2020 from a little over 5 million tons last year, according to the metal association.

Chinalco's overseas-listed branch, Chalco, operates an alumina joint venture in South China's Guangxi Zhuang Autonomous Region with Alcoa, the world's biggest alumina maker based in the United States.

Chalco went public in Hong Kong and New York at the end of 2001.

Chinalco said it aims to quadruple its total assets, annual sales and profits to 145 billion yuan (US$17.5 billion), 80 billion yuan (US$9.7 billion) and 7 billion yuan (US$845.4 million) respectively by 2015 from the levels in 2000.

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