Aluminum Corp. of China, the country's biggest producer, has set up a subsidiary based in Tibet to conduct mineral exploration, mining and smelting in the Himalayan region.

    The 250 million yuan (US$36.5 million) wholly-owned subsidiary's founding was celebrated in a ceremony in Tibet's capital, Lhasa, attended by regional political and business leaders, the company, also known as Chinalco, said in a statement seen on its Web site Thursday. The subsidiary was named China Aluminum Tibet Mining Corp. Ltd.

    The move comes amid an acceleration of efforts to exploit Tibet's largely untapped mineral resources. The Ministry of Railways recently announced plans for six new railway lines in and around Tibet, following the opening in 2006 of the final link in a line from Beijing to Lhasa.

    In its statement, Chinalco pledged to pursue cooperative and socially responsible development in the region. The company, the world's second-biggest producer of alumina, has faced criticism from environmental activists who charge that waste from a smelting plant it already operates in the Amdo region of eastern Tibet is harming local livestock herds and water supplies.

    Chinalco has moved to boost its resource bases both inside and outside China, teaming up with Alcoa Inc. earlier this year to acquire a stake in global mining company Rio Tinto PLC, then the largest overseas investment ever by a Chinese company.

    Today in Business with ReutersAs prices plunge, OPEC faces dilemma on oil productionECB and British central bank hold interest rates steadyChina and Singapore near free trade accordTibet is one of fast-growing China's last frontiers, with abundant deposits of copper, chromium, bauxite and other precious minerals and metals.

    Beijing is encouraging development of mining and other industries in the long-isolated region as a way to promote its economic growth and raise living standards. But others worry that the rush into Tibet could wreck much of the high-altitude region's delicate ecosystem, and that an influx of the majority ethnic Han Chinese threatens its Buddhist culture and traditional way of life.

    Foreign companies have also been allowed to begin minerals exploration and development in the largely pastoral region.

    Continental Minerals Corp., a Vancouver, Canada-based company, has conducted exploration and signed a preliminary agreement with Jinchuan Group Ltd. to develop an open-pit copper-gold-silver mine at Xietongmen, 240 kilometers (150 miles) southwest of Lhasa, according to Continental Mineral's Web site.

    The plan calls for the ore mined there to be shipped by road and/or rail to Jinchuan's refinery in Gansu province, far to the northeast.

    Chinalco's Shanghai-traded shares gained 1.14 percent to 9.72 yuan Thursday