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China's Largest Mining Company Announced Plans to Make a Major Push into Tibet.

Tina Wang, 09.04.08 Forbes


China's largest mining company announced plans to make a major push into Tibet, a politically volatile area that is rich in copper, chromium, and other mineral deposits.

The country's largest miner, Aluminum Corp. of China (nyse: ACH -news - people ), or Chinalco, is investing 250 million yuan ($36.5 million) to scout the region, the company's Web site said. A newly established unit, China Aluminum Tibet Mining, will conduct exploration, metals smelting, and sales activities.

A controversial railway link between Beijing and Lhasa that was built in 2006 has opened up a cheap transportation route between Tibet and the rest of China, and the Ministry of Railways plans to expand Tibet's rail network further.

The Yulong copper deposit in southeastern Tibet, China's largest copper deposit, already has drawn domestic mining companies. Western Mining and Zijin Mining Group plan to begin digging in September. Chinalco currently operates a smelting plant in the Amdo region in eastern Tibet.

Pro-Tibet groups have criticized Canadian and Australian mining companies for setting up exploration activities for mines, which activists charge harm local water supplies and the ecosystem, step up immigration of Han Chinese into the region, and offer Tibetan communities few of the resulting economic benefits. Canada-based Continental Minerals (otcbb: KMKCF.OB - news - people ) drew protests at its headquarters in 2006 when its plans to open a copper and gold mine in Tibet became public. The group has inked a preliminary agreement with Jinchuan Group to develop the mine in the Xietongmen region.

In 2003, Australia's Sino Gold withdrew exploration activities for a gold mine in the Jinkang region of eastern Tibet following fierce criticism from Tibet groups around the world. Chinalco said in its Web statement that it aims to adopt a socially responsible development strategy.

The company acquired a 9% stake in Rio Tinto for $14.1 billion in February and expects to raise its interest to 11% (See " Australia Steps Out Of Chinalco's Way.")

In noon trading in New York, Chinalco American Depositary Receipts were down 69 cents, or 3.37%, to $19.81


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