China's Baotou Aluminium Group has officially announced Friday that it is now part of Chinalco, having transferred 80% stake in the group to Chinalco on December 30, 2006, a company official told Platts.

"The transfer and paperwork were all settled on December 30, but we only just announced it," he said. "The move to join Chinalco was actually decided in 2003 when we had signed a preliminary agreement, but it took a while to finalise everything," he added.

The official said there were no plans yet to expand production capacity following Chinalco's takeover, "as the state policies now have very strict control over expansions". But he added that a major advantage of being part of Chinalco is that "we can at least expect a steady supply of alumina from now on".

Baotou Aluminium Group has a current combined aluminium ingot and alloy production capacity of 320,000 mt/year, and expects to produce about 300,000 mt in 2007. Output in 2006 totaled 260,000 mt.

"We can produce more this year as we had just fully ramped up capacity to 320,000 mt/year at the end of last year. Before that, even though design capacity was 320,000 mt/year, operating capacity was lower," the official said.

Of the expected output, Baotou will produce about 70% aluminium alloys, with the remaining being 99.92-99.7% aluminium ingot. The company also started producing high-purity 99.992% grade aluminium ingot at the end of 2006, and aims to produce about 10,000 mt this year.

Chinalco is the parent company of Chalco, the largest producer aluminium in China. Chinalco officials could not be reached for comment Friday.