OPTIONS: Aluminum foundries facilitate China Minmetals plan to increase exploration of nonferrous metals resources

Last December was a busy month for China's leading business entity for all things metal and mineral, China Minmetals Corp. (China Minmetals), as it officially established another business arm, China Minmetals Corp. Ltd. (Minmetals Ltd.) - a significant step forward in the company's restructuring.

Minmetals Ltd. has a total of 24.6 billion shares, with China Minmetals controlling 96.5 percent and China National Metal Products Co. Ltd. holding 1 percent. The newly founded China Guoxin Holding Co. Ltd., the third state-owned asset management company under the State-owned Assets Supervision and Administration Commission (SASAC), also became a strategic investor of Minmetals Ltd., holding a 2.5-percent stake.

China Minmetals incorporated its ferrous metals, non-ferrous metals, logistics, real estate and sci-tech divisions into Minmetals Ltd.

"Minmetals Ltd. will serve as a new platform to expand China Minmetals' overseas and domestic assets," said Zhou Zhongshu, President of China Minmetals.

Recent progress

Founded in 1950, China Minmetals is China's leading state-owned enterprise engaged in metal and mineral mining, trading and utilization. It also has a hand in the financial, real estate and logistics sectors.

Before China's reform and opening up in 1978, China Minmetals was the country's major foreign trader. It had a total trade volume of $33 billion from its founding to 1978, accounting for 19.41 percent of the country's total during that period.

Since 2000, China Minmetals has restructured its business units and made a new development strategy, which includes extending its business chain for exploration, development, mining, and smelting, rather than solely depending on metal and mineral trade.

By rethinking the company's mission and implementing a new development strategy, China Minmetals has realized rapid, sustained growth since the beginning of the 21st century, said Zhou.

In 2009, China Minmetals recorded total business revenue of 173 billion yuan ($26.2 billion) with profits of 3.15 billion yuan ($477.2 million), ranking 332nd on the 2010 Fortune Global 500 list. It was 30th in the Top 500 Chinese Enterprises in 2010, released by the China Enterprise Confederation and China Entrepreneur Association last September.

Last year was the 60th anniversary of the company. Its sales revenue and profits for 2010 are expected to reach 200 billion yuan ($30 billion) and 6 billion yuan ($900 million), respectively. Its profits totaled 7.1 billion yuan ($1.075 billion) in 2008, with its sales revenue totaling 180.9 billion yuan ($27.4 billion) in 2008.

This year, the company's targets for sales revenue and profits are 240 billion yuan ($36 billion) and 8 billion yuan ($1.2 billion), respectively, Zhou said.