The company is the world's second-largest alumina producer and fourth-largest primary aluminum producer. It is also China's biggest alumina and primary aluminum manufacturer. Since its establishment in September 2001, its alumina production capacity has surged from 4.56 mln tons in 2001 to 9.01 mln tons in 2006, with a 14.58% compound annual growth average (CAGA) and a primary aluminum production capacity that increased from 740,000 tons in 2001 to 2.48 mln tons in 2006, with a 27.38% CAGA. Its alumina production is second only to Alcoa. In 2007, its alumina production was 9.57 mln tons, up 8.38% from a year earlier; alumina production was 2.8 mln tons, up 45.08%. The company is expected to produce 10.2 mln tons of alumina and 3.62 mln tons of primary aluminum in 2008. The company holds an aluminum reserve of 630 mln tons, which could support its alumina production for more than 30 years at its current production level.

In addition, it is also actively engaged in developing foreign bauxite resources. The company has bauxite projects in Australia and Vietnam. At the end of 2007, the company together with MMC from Malaysia signed a framework agreement with Saudi Binladin Group (SBG) of Saudi Arabia to build an electrolytic aluminum plant with a one million ton annual production capacity in Saudi Arabia, in which the company will hold a 40% stake, making it the largest shareholder.

On 21 June 2008, the company announced some negative news regarding its operations in 2008. Early this year, snowstorms disrupted power supply and shut down many of its plants, thus affecting its production. Production costs surged amid price hikes of energy and raw materials. It projects that its interim net profit for 2008 is likely to decrease by more than 50% YOY.

The company's stock has plummeted from RMB 60.00 per share to its current price of RMB 12.00. Recently, the stock price has stabilized and turnover has increased. Investors are advised to pay attention the company's stock.

Risk warning: market fluctuations may cause the stock to slip further.

Source: www.gf.com.cn

Date: 30 Jun 2008

CN01/RZ/MZ/KM