Aug. 6 (Bloomberg) -- Aluminum Corp. of China Ltd., the nation’s largest aluminum producer, rose to a nine-month high in Shanghai after a plan by its parent to set up a rare earth company was approved by the central government.
The shares jumped the daily limit of 10 percent to 4.07 yuan at the close of trade, the highest since Nov. 5, 2013. The Shanghai Composite Index fell 0.1 percent. Chalco, as the company is known, also advanced in Hong Kong, rising 9.4 percent to HK$3.74.
China’s Ministry of Industry and Information Technology approved parent Aluminum Corp. of China’s rare earth company plan, the State-owned Assets Supervision and Administration Commission said today. The new company will consolidate rare earth mining and processing in provinces including Guangxi, Jiangsu, Shandong and Sichuan, according to a statement on the commission’s official microblog.
“Even though the news has been expected by the market, investors have more confidence about the company’s performance with the future injection of rare earth assets,” Sarah Wang, an analyst with Masterlink Securities Corp., said by phone.
China, which accounts for 90 percent of the world’s production of the elements used in products from smartphones to hybrid-car batteries, is consolidating its rare-earths industry to reduce pollution and conserve supplies.
A plan by Baogang Group to set up a rare earth group also won approval from the ministry, Baotou Steel Rare-Earth Hi-Tech Co. said yesterday in a statement.
MIIT also approved Xiamen Tungsten Co.’s plan to streamline rare earth development and processing in Fujian province, the company said yesterday in an exchange filing. Meanwhile, Guangdong Provincial Rare Earth Group, established by Guangdong Rising Assets Management Co., hasn’t received all regulatory documents needed to start consolidation, according to a statement from Rising Nonferrous Metals Co. to Shanghai Stock Exchange.
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