China Power Investment Corp reached an agreement with Ningxia Hui autonomous region on Dec 26 to restructure Qingtongxia Aluminum and form China's second largest aluminum smelter after Chalco.

The registered capital of the new joint venture will be 5 billion yuan ($730 million), in which China Power will hold 70 percent of the stakes while the State-owned Assets Supervision and Administration Commission of Ningxia controls the remaining ones, Ningxia Daily reported.

According to the plan, the joint venture aims to produce 33 million tons of coal and 1.66 million tons of electrolytic aluminum every year as well as build a complete industrial chain with a gross output exceeding 100 billion yuan.

Qingtongxia Aluminium has also reached an agreement with Rio Tinto Alcan to buy back all the shares of a joint venture smelter it formed with the latter in 2004. It is estimated that Rio Tinto Alcan will get a compensation of 700 to 800 million yuan for its 50 percent share of the joint venture smelter.

China Power Investment is one of the five largest power producers in China.