Dec. 18 (Bloomberg) -- Aluminum Corp. of China, the state- owned parent of the nation's biggest producer of the lightweight metal, won more central government backing to diversify into copper and rare earths.

Chinalco, as the company is known, will enjoy more state backing to buy local and overseas metals producers with a so- called mandate from the State-owned Assets Supervision and Administration Commission, the company said in a statement on its Web site late yesterday. The terms and type of the enhanced state support were not described.

China is encouraging the formation of bigger metal producers through mergers and takeovers to boost economies of scale, enhance efficiency and promote competitiveness. Chinalco this year bought its first copper businesses, acquiring Peru Copper Inc. and Yunnan Copper Group Co. for a combined $1.9 billion.

``The diversification is in Chinalco's interests, and also fits in with the central government's policy to concentrate resources and capital into key industries that matter to state economic safety,'' the statement said.

Beijing-based Chinalco owns a majority of Shanghai and Hong Kong-listed Aluminum Corp. of China Ltd., the world's third- biggest producer of aluminum and second-biggest maker of alumina. Chinalco Chairman Xiao Yaqing has said the company plans further global acquisitions of copper mining companies and smelters.

To contact the reporter for this story: Xiao Yu in Beijing at yxiao@bloomberg.net

Last Updated: December 17, 2007 20:57 EST