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Alcoa cashes out of Chinalco venture
Washington (AFP) Feb 12, 2009 US aluminum giant Alcoa said Thursday it was pulling out of a joint venture with China's state-owned Chinalco that had been established to buy a stake in Anglo-Australian mining giant Rio Tinto. Alcoa will receive 1.02 billion dollars for the stake plus dividends from the venture called Shining Prospect. The US-based firm, one of the biggest aluminum makers, said it would continue to work with Chinalco and would "explore opportunities to expand their commercial relationship by identifying strategic ventures." But Alcoa will cash out its investment in the Rio Tinto venture, which had been initiated last year and expanded in the announcement hours earlier by the Chinese firm. Selling the stake "strengthens Alcoa's ability to weather the economic downturn," said Klaus Kleinfeld, Alcoa president and chief executive. "When the global economy recovers, the pent-up consumer and industrial demand will create a broad array of opportunities in both developed and developing regions for Chinalco and Alcoa." Chinalco earlier Thursday unveiled Beijing's biggest investment ever in a foreign company, putting 19.5 billion dollars into the troubled Rio Tinto. But the move, which would give China more leverage over the resources and raw materials that have fueled its economic boom, immediately hit an apparent snag as Australia announced plans to amend its foreign investment laws. The Alcoa-Chinalco venture had invested 14.2 billion dollars for a nine percent stake in Rio Tinto last year. In January, Alcoa said it would slash some 13,500 jobs or 13 percent or its global workforce and reduce output to cope with the global economic downturn. Alcoa is planning cut its primary aluminum output by 18 percent. Alumina production will also be reduced to meet lower market demands. The company based in Pittsburgh, Pennsylvania, said it would take other steps to trim costs for energy and raw materials, including looking at alternate suppliers. Related Links The Economy
China puts 19 bln dollars into Rio Tinto
Sydney (AFP) Feb 12, 2009China's state-owned aluminium firm Chinalco on Thursday unveiled Beijing's biggest investment ever in a foreign company, putting 19.5 billion dollars into troubled mining giant Rio Tinto. |
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