By Clarence Leong


Shares of Aluminum Corp. of China Ltd. rose Monday after the company agreed to increase its stake in Yunnan Aluminium Co., which analysts said will make the company the world's largest aluminum producer.

Shanghai-listed shares of the company, also known as Chalco, advanced as much as 5.5% in early trade. The Hong Kong-listed stock rose as much as 8.2% before paring gains to trade at HK$2.83, up 1.4%. The H-shares have lost 34% so far this year. Hong Kong's benchmark Hang Seng Index was last 0.7% lower at 20461.31.

Yunnan Aluminium's stock was recently 2.7% higher at CNY9.84.

Chalco will pay 6.66 billion yuan (US$986.5 million) to purchase a 19% stake in Yunnan Aluminium, taking its total equity interest in the Shenzhen-listed company to 29.10%, it said in a Sunday filing.

After the deal is completed, Yunnan Aluminium will become a subsidiary of Chalco, and its financial results will be consolidated into Chalco's earnings, according to the filing.

Analysts at Citigroup said the acquisition will make Chalco the world's largest aluminum producer with a smelting capacity of about 7.5 million metric tons a year. Chalco's cost of producing the base metal could also decrease thanks to lower costs in Yunnan, a province in southwestern China, they added.


Write to Clarence Leong at clarence.leong@wsj.com


(END) Dow Jones Newswires

07-24-22 2311ET