Chinalco's New Boss: Xiong Weiping

By Yan Kai, Zhu Xiyan
Published: 2009-02-18

From P25, issue no. 406, February 16, 2009
Translated by Tang Tang
Original article:

Former mining boss Xiong Weiping would leave behind his role as a tourism executive to head up one of China's star aluminum companies, now on the cusp of securing a major international investment deal.

He would replace Xiao Yaqing, the current president of Aluminum Corporation of China (Chinalco), who would move on to become a deputy general secretary of China's State Council, the top communist party staffing department said on Tuesday afternoon.

Xiao would leave Xiong with the task of shepherding Chinalco through the deal's last phase of regulatory approval.

The deal, if approved, would have Chinalco double its share in the Anglo-Australian firm Rio Tinto Group, the world's third largest mining company.

Xiong has up to now served as vice chairman and general manager at China National Tourism Service Hong Kong (CTS HK). During his tenure the firm saw its core tourism businesses suffer, but it simultaneously reaped enormous profits from a bonanza in diversified investments such as steel.

After serving as a vice-president at China Copper Lead Zinc Corporation (CLZC) in 1999, Xiong was appointed as a member of the preparatory team for Chinalco in 2000. Afterwards, he was successively promoted to vice-president of Chinalco.

In June 2006, Xiong was appointed as CTS HK's vice-chairman and general manager.

From the beginning, Xiong's tenure drew skepticism from tourism industry players due to his tourism-irrelevant background. During his term, China National Travel Service Group was merged into CTS HK. After that CTS HK operated badly in tourism with 11 tourism agencies registering 90 percent losses. Meanwhile, its most important revenues were coming from investments in other industries.

The EO found that CTS HK had invested in a steel firm in Tangshan, Hubei province; an eletric power generation company in Shaanxi province, and had even poured itself into real estate development projects.

"The state assets watchdog intended all along to strengthen CTS HK's core tourism business, but many of the recent top leaders in the company came with no tourism experience. Xiong Weiping was one of them," said one CTS HK employee.

On February 12, 2009, Chinalco and RioTinto signed an acquisition agreement amounting to 19.5 billion US dollars, including the purchase of convertible bonds. This agreement was still awaiting approval by the Rio Tinto shareholders and the Australian government.

"It is not time to be optimistic about the deal's prospects. We certainly will experience pressure, including from governments. Xiong still has a lot to shoulder," said one source close to Chinalco.

Some watching the deal closely were also worried if the transaction would go through. "Xiao Yaqing was the heart of the transaction team," said one industry veteran.

But others stressed that there was much more than Xiao driving it forward. "A mergers and acquisitions group within Chinalco was working on this transaction, along with several other intermediaries and consultating bodies. With the agreement already signed, Xiao's departure won't make a significant impact," said one source close to Chinalco.

Both Xiong and Xiao were well-known alumni of China's Centraul Southern University. Xiong served several high-level positions there, including as an assistant to the president and in two department directorships.