Jan. 29,  (China Knowledge) - Jiangxi Copper<600362><0358> is in talks with Yantai Penghui Copper Co Ltd to buy the latter, and the two companies have inked an initial cooperation framework, sources reported yesterday.

The sale is subject to approval from the State-owned Assets Supervision and Administration Commission.

Founded in March 1993, Yantai Penghui owns four production lines and is one of Yantai’s largest raw-copper refineries. It is mainly engaged in producing gold, silver and sulfuric acid. The company’s performance is worse than expected because its export license was cancelled in 2008.

Sources said earlier that Aluminum Corp of China is inclined to acquire Jiangxi Copper, but according to Li Tianou, director of Jiangxi SASAC, Jiangxi Copper is developing well and has no intention to be reorganized.

In 2009, Yantai Penghui’s annual production capacity of electrolytic copper was about 120,000 tons. Jiangxi Copper produces 900,000 tons of electrolytic copper per year.