By Chen Jialu (China Daily)
Updated: 2008-01-25 11:34

Aluminum Corp of China (Chinalco), the nation's top aluminum producer, will pair with London-listed Aricom Plc to set up a titanium sponge project in Heilongjiang Province.

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Chinalco will hold a 35 percent stake and Aricom 65 percent in the $300 million joint venture.

The plant, located in Jiamusi, a city in the province's north, is expected to have an annual capacity of 15,000 tons of titanium sponge after assuming full commissioning in 2009, Chinalco said in a statement.

The two sides have completed a feasibility study for the project and are waiting for approval from China's environment protection body, the National Development and Reform Commission and the commerce ministry.

Aricom will supply ilmenite, the ore from which titanium sponge is made, from its Kuranakh mine at Amur in Russia's east, 1,300 km from Jiamusi, Aricom said on its website.

Construction of the plant will be funded over three years on a 70 percent debt-equity ratio, and some Chinese banks will likely finance the debt portion, Aricom said.

Industry analysts predict titanium, a tough and lightweight metal widely used in airplanes and golf clubs, will see surging demand in China in the years to come.

Titanium sponge is the basic form of titanium.

Chinalco paid $860 million for 91 percent of Peru Copper Inc last August, which has exploration rights to the nation's Toromocho copper mine with estimated reserves of about 12 million tons of copper equivalent.