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||China Hongqiao to Buy African Bauxite Company for $120 Million
China Hongqiao Group Ltd., the nation's largest non-state aluminum producer, agreed to buy a company developing bauxite deposits in Africa for about $120 million.
Hongqiao and Winning Logistics (Africa) Co. signed an accord to buy an unidentified company developing a mine in Guinea, Shandong-based Hongqiao said in an e-mailed statement late yesterday. The target company holds the right to develop and produce bauxite for 25 years from a deposit with a total resource base of 2.2 billion metric tons, it said.
The proposed acquisition comes as Hongqiao seeks bauxite supplies after Indonesia, Southeast Asia's largest economy, banned exports of unprocessed ore in January. The company, one of the lowest-cost smelters in China, is ramping up output after rivals including Aluminum Corp. of China Ltd. shut plants.
Hongqiao plans to boost aluminum production by 30 percent to almost 3 million tons this year, Christine Wong, head of corporate finance, said in a phone interview last month. Wong disclosed during the interview that the company was in talks to buy a bauxite mine in Africa.
Bauxite is a raw material used in the production of aluminum.
China Hongqiao will hold 90 percent of the target company and Winning will own 10 percent after the deal is completed, Hongqiao said.