Jan. 25 (Bloomberg) -- China’s state-owned asset regulator named Xu Siwei as vice president of Sinosteel Corp., replacing Zhang Hanguang. Xu, who was also appointed to the position of the Communist Party’s top representative in the company, was previously vice president of China Minmetals Corp.
Xu was appointed yesterday by the State-owned Assets Supervision and Administration Commission during a meeting of Sinosteel executives, the company said today on its website. The statement didn’t say why Zhang was replaced.
Sinosteel and China Minmetals have transformed themselves into mine owners from being among China’s top three steel traders as the country’s demand for iron ore and copper surges. Sinosteel bought Australian iron ore miner Midwest Corp. for A$1.4 billion ($1.5 billion) in 2008 and has a stake in Rio Tinto Group’s Channar ore mine in the nation’s Pilbara region.
“There’s been a lot of speculation that Sinosteel is making huge losses, resulting from its aggressive expansion,” said Xu Zhongbo, chief executive officer of Beijing Metal Consulting Ltd., before the announcement. “Minmetals, which took a similar growth path, is doing a little better.”
Li Kejie, a spokesman at Sinosteel, couldn’t be reached for comment in three calls to his mobile phone today.
Minmetals rejected a merger with Sinosteel because its assets were “excessively poor,” the 21st Century Business Herald reported Jan. 18, citing a person it didn’t identify. China’s Sinochem Group and Sinosteel are in “early stages” of merger talks, the report said. Sinosteel denied it’s in talks with Sinochem in a statement last week.
He Jinglin, a media official at Minmetals, declined to comment.
Minmetals posted a pretax profit of 8 billion yuan ($1.3 billion) on sales of 325 billion yuan last year, according to its website. It was listed among 46 Chinese state-run companies recognized for corporate management by SASAC in 2011. In contrast, Sinosteel was accused of inflating sales at its units, the National Audit Office said in a 2011 statement. The company didn’t respond to the allegation.
Sinosteel’s sales gained 12 percent to 186 billion yuan in 2010, compared with 61 billion yuan in 2006, according to the latest figures available on its website and from the government.
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