Minmetals Resources, China's largest alumina importer, is in talks to buy several mainland aluminium smelting firms, as the metals trader seeks to expand into upstream segments of the industry. The acquisition talks went 'relatively well', although announcement of a deal was still some way off, said Wang Lixin, vice-president of the company, a listed unit of the nation's largest base metals trader China Minmetals Corp. Mr Wang declined to name the targets. Minmetals Resources has for two years been seeking to acquire aluminium smelters, many of which suffered from losses last year due to high raw material prices, namely alumina, and low selling prices of aluminium. Alumina is refined from bauxite and is further smelted into aluminium, a metal used in products ranging from aircraft to cars and packaging materials. However, a 55 per cent surge in the benchmark London Metals Exchange three-month aluminium futures contract price to about US$2,780 in the past 20 months and a 56 per cent plunge in domestic alumina price to 2,500 yuan a tonne since early August have substantially shored up the profitability of smelters in the past few months. 'Acquisition of smelters has become increasingly difficult,' Mr Wang said. Minmetals Resources is also mulling whether to exercise options granted by its parent to buy a 51 per cent stake in US-based Sherwin Alumina and a 33 per cent holding in Guangxi Huayin Aluminium. Sherwin has an operating plant in Texas capable of churning out 1.6 million tonnes of alumina, while Huayin is building an alumina refinery with the same capacity in Guangxi autonomous region. Minmetals Resources appears undeterred by the alumina price decline. It has until late next year to exercise the option. 'We, as a company that operates in the non-ferrous metals industry for the long haul, do not only look at two to three years of market volatility when making investment decisions,' Mr Wang said. 'We are looking at an investment horizon of at least 10 years.' Meanwhile, Mr Wang said the company is spending US$1 million on bauxite resources exploration in Jamaica. It hopes to complete initial drilling by May next year. It signed a contract last May with Nasdaq-listed aluminium producer Century Aluminium to study the feasibility of developing a bauxite mine and a 1.5 million tonne a year alumina refinery in Jamaica.