China Mining reported that China's largest aluminum alloy producer Baotou Aluminum Company has signed agreements to purchase electricity directly from power plants, the first company to formally carry out the nation's pilot program for direct power purchase.

Under the agreement, the Inner Mongolia Power Group and Shenhua Guohua Zhungeer Power Company will supply electricity to Baotou Aluminum at preferential prices from November 1st 2009 to December 31st 2012.

Mr Liu Zhirong GM of Baotou Aluminum said that the cooperation would help the company cut costs and stabilize its operation.

The Chinese authorities announced in March to pilot direct electricity supply for 15 domestic electrolytic aluminum firms from power plants. The program will help electrolytic aluminum enterprises reduce production costs and improve their competitiveness on the international market.

These selected enterprises include Fushun Aluminum Company, Yunnan Aluminum Company, and the Shanxi Aluminum Group, 5 subsidiaries of Chinalco, Gansu Hualu Aluminum Company, Baotou Aluminum Company, Aostar Aluminum Company, Shaanxi Tongchuan Aluminum Company, the Qingtongxia Aluminum Group, Shanxi Huasheng Aluminum Company and Qimingxing Aluminum Company.

(Sourced from China Mining)