HONG KONG, Nov 29: Aluminium Corp of China Ltd (Chalco), created just two months ago and now seeking a public listing in Hong Kong and New York, could be one of Beijing’s greatest success stories or a very costly extravagance.

Under the direction of the central government and modelled on US giant Alcoa Inc, China’s seven largest alumina and aluminium producers have been merged to form the world’s third largest alumina refiner and China’s largest aluminium producer.

“This has been a battle for the leadership in Beijing to get all the smelters to pull behind and work as one company,” said industry analyst Michael Komesaroff, managing director of Urandaline Investments Pty Ltd.

“These plants are used to operating as stand-alone enterprises and that is one of the big challenges, to see whether the Chalco leadership can impose discipline on its subordinate plants,” Komesaroff said.

Despite the management challenge, internal competition, and falling metal prices amid a global oversupply of aluminium, the company’s executives are brimming with optimism and ambition.

Chalco is seen as a national flag carrier in the harsh new world of 21st century competitiveness and World Trade Organization accession.

Led by Chalco, the government is forecasting China will be a net exporter of aluminium by 2005, if not sooner, competing for global market share with the industry’s traditional leaders as well as low-cost challengers from Russia and India.

“China views aluminium differently than other metals and they have spent more money on aluminium,” said one industry analyst in Hong Kong.

The aluminium giant is the only nonferrous metals group to survive more than a decade of centralisation, decentralisation and now recentralization of its administration and management.

Chalco was formally created in September with the transfer of assets from its parent company. Its large plants, employing more than 14,000 people, span the four corners of the country.

They are Great Wall Aluminium in Zhengzhou in central Henan province and its subsidiary Zhongzhou Aluminium, Shanxi Alumina in the northwest, Shandong Aluminium on the northeast coast, Qinghai Aluminium in the far west, and Pingguo Aluminium and Guizhou Aluminium in the south.

Pingguo Aluminium, brought on line in 1995 and the newest of the group, and Guizhou Aluminium both lie close to rich bauxite resources and are the group’s integrated producers of alumina, the intermediate product in the metal production, and aluminium.

Shanxi and Great Wall are the chief alumina producers, with capacities of 1.2 million tonnes and 950,000 tonnes.

In all, the group has annual production capacity of 4.18 million tons of alumina and 689,000 tons of primary aluminium on a par with industry giants BHP Billiton of Australia, Pechiney S.A. of France and Alcan of Canada.—Reuters