Shandong Aluminum Co. Ltd., Chinalco's alumina subsidiary, started production at a 630,000-ton alumina project Monday, said a company official.

The project will use imported bauxite to produce alumina and use Bayer technology, in line with the China Aluminum Industry Development Policy.

Although the project is able to make 630,000 tons of alumina per year, the company may not rush into full production because the alumina market is in oversupply and the current price is at a very low level, said an official with the company's securities affairs department, who asked to remain anonymous.

Shandong Aluminum is Chinalco's major alumina making subsidiary. Its capacity totals 1.5 million tons per year.

Chinalco has cut its alumina price to RMB 2,400 ($ 307.69) per ton pressured by an alumina capacity boom in China.