China Formally Launches Giant Aluminum Group

China formally launched a giant aluminum group called the Aluminium Industry Group of China in an effort to boost competition and rein in the country's overheated aluminium expansion.

The group will be headed by Chalco and includes more than 40 other major aluminum smelters, .

It said the first batch of smelter members included Qingtongxia, Baotou, Lanzhou, Longgang Yuquan, Wanji, Shanxi Guanlu and Baiyin Honglu, but it did not give specific figures of the group's combined capacity.

Chalco officials said earlier this month the group would control 70 percent of China's output, which is expected to grow 20 percent to 5.3-5.4 million metric tons in 2003, putting it on par with global giants such as Alcoa or Alcan.

"Our aim is to raise competitiveness of our member firms to curb market risks and boost product quality and jointly explore the global markets," the group said in Monday's announcement.

China has become the world's largest primary aluminum producer and a net exporter of aluminum, with its aluminum capacity doubling in the past three years to 5.2 million tons a year. It produced 4.3 million tons of aluminum last year. China's aluminum industry is overcrowded with 130 smelters -- more than the rest of the world combined -- and many of them are small and inefficient while others are expanding too quickly.