China's largest aluminum producer Aluminum Corp. of China Ltd., ACH (Chalco) plans to cut its capital expenditure for the next two years by 20-30 percent so as to leave more money for possible acquisitions to expand capacity, said XiaoYaqing, chairman of Chalco Tuesday.

    The company also plans to cut the capital expenditure budget for the second half of 2008 by 20-30 percent, from the original 9.9 billion yuan, Xiao said.

    Chalco earlier projected annual capital expenditure at 20 billionyuan for both 2009 and 2010.

    Xiao said there are lots of chances for acquisition in and outside China. Chalco is trying to purchase bauxite mines in Vietnam and Indonesia to ensure raw materials supply.

    Xiao predicted that 50 percent of its bauxite demand would be self-supplied by the year of 2009, up from the present 25 percent.

    Chalco announced last Saturday that it planned to issue no more than 10 billion yuan of ten-year corporate bonds in China, which will reduce its interest expenditure by 100 mln yuan annually.

    Affected by production cost surge and product price plunge, the net profit of Chalco fell by 65 percent to 2.41 billion yuan in H1.

    Analysts expect the operating cost of Chalco to stay at high level for rising prices of raw materials and energy.

    Meanwhile, as Xiao predicted, aluminum price in Chinas would continue to face pressure of going down for slowdown of domestic demand.

    Chalco targets to produce 10.2 mln tons of aluminum products in2008, compared with 9.57 mln tons in 2007. Besides, it plans to produce 3.62 mln tons of primary aluminum in 2008, higher than the 2.8 mln tons in 2007.