ALUMINUM Corp of China, or Chinalco, has agreed to buy a local partner in Jiangxi Province and plans to invest at least 10 billion yuan (US$1.5 billion) in rare earths.

The plan, a major step forward by Chinalco to diversify into other metals, boosted the share price of its listed unit, Chalco, by 10 percent yesterday in Shanghai trading.

Chinalco agreed to take control of Jiangxi Rare Earth and Rare Metals Tungsten Group, it said in a statement late Monday. Chinalco will use not less than 10 billion yuan in the next three to five years to help the Jiangxi company develop rare earth resources as it seeks to lift revenue in this sector. Chinalco boosted its revenue to 50 billion yuan from 8.94 billion yuan last year.

Rare earths are a group of 17 metals used in a wide range of green energy technologies and military applications.

Chinalco, which recently set up a rare earth subsidiary, aims to become a strongly competitive company in this sector, it said.

The company is also investing in copper and iron ore to cut its reliance on aluminum smelting, a sector filled with overcapacity and rising costs of power.