Aluminum Corp. (2600) of China Ltd., the nation’s biggest producer, said it swung to a full-year loss on falling prices and higher costs for alumina, which is used to produce the lightweight metal.
The Beijing-based company reported a “substantial” loss in the year ended Dec. 31, compared with net income of 238 million yuan ($38.2 million) in 2011, according to a filing to the Shanghai stock exchange, which didn’t provide 2012 numbers. Aluminum Corp., also known as Chalco, usually announces complete earnings in March.
Aluminum prices dropped about 7 percent last year. Limited supply of bauxite, a raw material, led to a 4 percent increase in costs for alumina production, Chalco said today. The producer of aluminum, used in cars and beverage cans, in October posted a 1.08 billion yuan third-quarter loss, compared with a profit of 555 million yuan a year earlier.
The company will continue to lower costs by increasing self sufficiency in mining and power generation and streamlining purchasing, it said in the statement. Chalco’s investments in coal and power projects will help improve profits, according to the statement.
Chalco shares gained 0.5 percent today to HK$3.75 at the close in Hong Kong. They have dropped 7.9 percent in the past year, compared with a 15 percent increase in the benchmark Hang Seng Index. The announcement was made after trading ended.
The company has sought to diversify into businesses such as coal and iron ore mining to reduce its dependence on aluminum smelting. Chalco dropped an offer to acquire Vancouver-based SouthGobi Resources Ltd. (SGQ), which mines coal in Mongolia, for C$925 million ($919 million) in September because it wasn’t able to get regulatory approval from the neighboring nation.
Chalco’s President Luo Jianchuan said in a November interview the company plans to build an alumina plant in Indonesia after the country imposed limits on the exports of some mineral ores, including bauxite, in May.
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