China bauxite foreign dependence 60%

Sinochem New Network News Recently, the Chinese consortium of the Guinea Simandu iron ore project of China Aluminum Corporation and Rio Tinto was formally established, which became an important milestone in Chinalco’s “going global” strategy. During the financial crisis, Chinalco suffered a great impact. After controlling for losses and increasing profitability and all-round deep structural adjustments, it ended a huge loss for two consecutive years at the end of 2010 and achieved a total profit of more than 2 billion yuan. At present, Chinalco ranks eighth in China’s multinational corporations with a scale of more than RMB 120 billion in overseas assets. It has been listed in Fortune Global 500 for 4 times in a row and is steadily walking on “building the most growth-oriented world-class mining company. "The big road.

The war crisis, control losses and increase profits to open a new round of financial crisis in 2008, an avalanche of non-ferrous metal prices, Chinalco suffered serious losses for two consecutive years. "The challenge brought by the crisis is essentially the fact that Chinalco's economic structure and institutional mechanisms are not suitable for market competition and must fundamentally solve these problems. The transition and reform in the crisis will have the lowest cost and the best results. The most thorough solution is to solve the problem," said Xiong Weiping, general manager of Chinalco.

For China Aluminium in the crisis, the strategic transformation must firstly win the battle to control losses and increase profits. Chinalco took the lead from Xiong Weiping to take a 30% pay cut. All members of the Party Group shouldered the responsibility of controlling losses and gaining profits. They came down to the front line to gain morale, grasp production, run the market, and visit customers; all departments need to benefit from management, technology, and markets. Each company survives, compresses inventory, compresses management expenses, tightens investment projects, tightens costs, and tightly manages funds. All non-productive projects are compressed. “The strategic transformation of Chinalco is a complete system. The key to completing the strategic transformation lies in the status, motivation and vitality of people,” said Xiong Weiping.

Through strong management reforms, Chinalco's 65 companies, management agencies, and management personnel have contracted by more than 30%, and about 13,000 branch-level departmental-level cadres have left more than 4,000 management positions.

From 2009 to 2011, Chinalco achieved a fundamental shift from an annual loss of 7 billion yuan to a profit of 3 billion yuan.

With structural adjustments, why did the mining companies have a rudimentary financial crisis affecting Chinalco so much? "It's not that we didn't do well in the past or that we didn't work hard, mainly because in the extreme case of the financial crisis, we tested out that our industrial structure was too single and one aluminum went black." Xiong Weiping said that adjustments must be made. Industrial structure, creating a multi-metal integrated mining company.

While controlling losses and gains, Chinalco has initiated a full-scale deep structural adjustment, eliminated out-of-competitive backward production capacity, shifted high energy-consumption capacity, and invested resources in the western region where resources and resources are abundantly enriched; and strengthened mineral resources. Resource exploration, entering the coal and power generation industries, launching a number of coal-electricity-aluminum integration projects and low-carbon projects assembled with new technologies; strengthening integration and cooperation in the field of mineral resources, and actively participating in the investigation, investment and development of domestic and foreign resources . As a result, Chinalco has transformed itself from a single aluminum block to nine major segments such as aluminum, copper, rare earth, international engineering technology, and overseas investment, and has an integrated mining company structure.

Since September, the aluminum industry has experienced a reversal of the product price fall below the cost of production when the financial crisis recurred. Chinalco’s aluminum sector has experienced monthly losses. However, Chinalco is still profitable overall. It is the profits of the rare earth, energy, and financial sectors in the nine business segments that effectively offset the losses in the aluminum sector. "Even if there is another financial crisis, Chinalco will never show the same situation as last time," Xiong Weiping said.

Going out and recreating a "China Overseas Aluminum"

“At present, the external dependence of China’s bauxite has reached 60%, copper concentrate exceeds 80%, and iron ore reaches 65%. Whether it is starting from the national economic security or looking at its own development expectations, it is always Chinalco must choose," Xiong Weiping said.

Based on the national resource strategy, Chinalco actively seeks opportunities for overseas development and tracks and promotes resource development projects in more than 20 countries. In 2008, Rio Tinto acquired 12% of the shares of British listed company for US$14.05 billion and became the single largest shareholder of Rio Tinto. In 2010, it signed a joint venture agreement with Rio Tinto Group to jointly develop approximately 5 billion tons of world-class premium iron. Mine’s Simandou project in Guinea; acquired 60% of the shares of the Laos Mineral Resources Company in 2011, and acquired 300 million tons of bauxite development rights.

Chinalco, with its international engineering general contracting as its leader, transfers aluminum production capacity and exports aluminum industry technology to more than 10 countries including India, Vietnam, Kazakhstan, and Malaysia, and drives exports of related equipment, products and services. At present, the company has successfully acquired a Canadian PE project company and obtained priority cooperation interests in the company's existing 19 projects in Mexico, Peru and all future new projects. In the “going out” process, Chinalco has always adhered to the following three principles: combining the country’s strategic needs with the company’s own development needs, conducting friendly cooperation to achieve mutual benefit and win-win results, and better integrated into the local community as a good corporate citizen.

In the first year of the 12th Five-Year Plan, Chinalco established the strategic goal of “building the most growth-oriented world-class mining companies”. “By 2015, it will enter the ranks of the top ten mining companies in the world; by 2020, it will enter the top five world-class mining companies with comprehensive strength, overseas assets will reach 30%, and upstream assets will reach more than 55%.” Xiong Weiping said, “Over the next 10 years overseas Create a Chinalco."

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