CHALCO may lose control over Guinean Iron Mine

Aluminum Corporation of China may lose its controlling position over its open-pit iron mine in Guinea, West Africa, following the agreement it reached with the Guinean government that the latter will be given the option to increase its stake in the iron mine to 35% over the next 20 years

Shanghai Securities News, citing a company filing reported that fifteen percent of the 35% will be given to the government free of charge. The final shareholding of Chalco in the iron mine may be reduced from 45% to 30%.

Chalco started the joint development of the target iron mine with Rio Tinto in July 2010.

According to the original agreement, Chalco will purchase a 47% stake in a joint venture established with Rio Tinto for the joint development of the iron mine over the next three to five years.

The joint venture will hold a 95% stake in the iron mine. The Guinean government had an option to purchase up to a 20% stake in the iron mine.