Chalco promised before its debut on Shanghai bourse last year that it would buy Liancheng Aluminum before end-2007, settle the same-sector competition with Tongchuan Xinguang Aluminum within one year after its listing, and acquire Baotou Aluminum.

Liancheng Aluminum, Tongchuan Xinguang Aluminum and Baotou Aluminum are primary producers subordinated to Chinalco so that they have competition with Chalco. Chalco bought out Baotou Aluminum in December last year to fulfill its promise.

The failure to honor commitment aroused notice of the Beijing Bureau of China Securities Regulatory Commission, which urged Chalco to solve same-sector competition between its holders and the actual controller.

In response, Chalco announced on December 27 that it is discussing the integration scheme with its parent but declined to make further promise.

Liancheng Aluminum had 270,000 tons of production capacity of primary aluminum in 2006 and produced 257,500 tons, accounting for 37 percent and 40 percent of the total of the three primary smelters respectively. Its net asset was 1.118 billion yuan by the end of 2006 and its sales revenue was 4.687 billion yuan in 2006. Its net profit hit 317 million yuan that year. The figures indicate Chalco’s buyout to Liancheng Aluminum is positive.