SYDNEY, March 16 - Chinese aluminium group Chiping Xinfa Huayu Alumina Co Ltd. has bought 10 percent of Australia's Cape Alumina Pty. Ltd., underscoring China's hunger for the aluminium-making material.
Xinfa paid A$4.6 million ($3.6 million) for the interest in Cape Alumina, said Cape's 40-percent owner, Metallica Minerals Ltd. Metallica's shares closed over 8 percent higher on Friday.
Cape Alumina is prospecting in Australia's bauxite-rich Cape York region, where world number two miner Rio Tinto Ltd./Plc. also has mining operations.
Metallica, which will hold on to its stake in Cape Alumina, said imports of bauxite by China's alumina refineries had grown 300 percent to 10 million tonnes last year, and could grow to twice that level in a year.
Generally it takes about four tonnes of bauxite to make two tonnes of alumina to make a tonne of aluminium.
On a larger scale, Aluminum Corp. of China Ltd. (Chalco) said earlier this week it expects to sign a deal this month to develop a $2.3 billion bauxite and alumina project at Aurukun, near Cape Alumina's property.
Chalco, the world's top alumina producer after Alcoa Inc. of the United States, has said the first phase of the mine will have a production capacity of about 2 million tonnes of alumina annually.
Metallica said it was talking with traditional Aboriginal landowners over access and that off-take negotiations between Cape Alumina and Xinfa would start next month, subject to delineation of sufficient resources to justify the development costs. ($1=A$1.27)
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