| Alcoa refused to build an alumina complex in Komi together with Viktor Vekselberg Chairman of the Board of Directors of SUAL-Holding Viktor Vekselberg announced last Saturday in St. Petersburg that the American company Alcoa refused to jointly with SUAL build an alumina complex in Komi as part of the Komi Aluminum project - the most ambitious project of SUAL and the largest investment project in Russia . As you know, the construction of an alumina-aluminum complex appears in the draft state guarantee program for the next year: in the section “guarantees against non-commercial risks” opposite this project the amount of $200 million is written down.
Komi Aluminum requires investments of $2.1 billion. The plant will annually produce 1.4 million tons of alumina and 300-500 thousand tons of primary aluminum. Due to this, SUAL will increase metal production by approximately 60% (the group currently produces 890 thousand tons of primary aluminum per year). At the beginning of July, the head of Komi, Vladimir Torlopov, signed a decree on the allocation of a site for the construction of an enterprise, which actually means a “green light” for this project.
To build the plant, SUAL needs a strategic partner, and the group previously named the world's largest aluminum producer Alcoa as this. However, on Saturday it became clear that this concern will not participate in the creation of alumina production. As Mr. Vekselberg explained, for Alcoa “this is the creation of competing capacities; they have a fairly large amount of resources around the world and, on the contrary, invite us to participate in their alumina projects.” But Alcoa, according to the head of SUAL, is interested in the construction of an aluminum smelter in Komi and is “ready to participate.”
Meanwhile, the signing of an agreement with a strategic partner is being slowed down due to the fact that there are no long-term agreements on the supply of electricity to future enterprises - SUAL needs to reserve capacity at the Pechora State District Power Plant in the amount of 860 MW. Vice-president of the holding Vasily Kiselev says that a preliminary agreement with RAO UES of Russia on the reservation has been reached, all that remains is to agree on tariffs. But the energy industry cannot give long-term tariff guarantees to aluminum workers, since no one undertakes to predict what gas prices will be within 10-15 years. In the meantime, there is no agreement with the strategic partner, SUAL is in no hurry to place a Eurobond issue in the amount of $300-400 million, the funds from which were also supposed to go to Komi Aluminum. True, Mr. Vekselberg also names another reason for postponing the loan: “The market conditions are now unattractive,” he says. Therefore, the group will return to consider the issue of issuing Eurobonds “no earlier than the fall.”
However, representatives of SUAL say that the company, regardless of the fate of the project in Komi, plans to create new production facilities with a volume of about 500 thousand tons of aluminum per year. The holding makes it clear that if the tariff guarantees required by SUAL are not received, then perhaps less aluminum will be produced in Komi, but another plant will be built in the Leningrad region. Mr. Vekselberg visited the Leningrad region last Saturday and spent almost half a day negotiating with Governor Valery Serdyukov. The result of the meeting was the decision to build a new aluminum smelter in the region. Mr. Vekselberg did not name the parameters of the new plant in the region, but he announced plans to increase the capacity of the Volkhov aluminum plant, which he owns, by 50%, which currently produces 22 thousand tons of metal per year.
There are no energy problems in the Leningrad Region - on the contrary, the Leningrad Nuclear Power Plant is not operating at full capacity. In addition, according to Mr. Vekselberg, there are ports nearby through which metal can be exported and, if necessary, raw materials can be imported.
In 2000-2002, there were already two attempts to build aluminum smelters in the Leningrad region. The investors were the structures of the St. Petersburg vodka king Alexander Sabadash, as well as the American company Alutech, which wanted to produce up to 560 thousand tons of metal per year. But in both cases, investors were unable to reach an agreement with the authorities. SUAL seems to be okay with this: Mr. Vekselberg said that the construction of an aluminum smelter is “absolutely real, this is not theoretical.” And he added that the company is “very interested in taking part in the development and creation of a free economic zone and placing its production assets there.”
We are talking about a hypothetical free zone in the Luga Bay area, where the Ust-Luga trade port is being built and where it is planned to locate the TNK-BP oil terminal (in which Mr. Vekselberg holds the post of chairman of the board of directors and managing director for production and technology). By the way, Mr. Vekselberg for the first time confirmed the oil company’s intention to locate an oil transshipment complex on the shores of the Gulf of Finland. “The company will build a terminal on the shore of the Gulf of Finland, that’s for sure,” said Mr. Serdyukov.
At a press conference in St. Petersburg, Mr. Vekselberg also announced that Fleming Family and Partners and SUAL have completed the formation of the SUAL International holding. “Fleming today owns about 5% of the shares of the combined assets of the entire holding,” said the oligarch. And he complained: “What we were counting on in the first place—the annexation of Cuban nickel assets—is delayed due to reasons beyond our control and is associated with the group’s unresolved agreements with the Cuban government.” Mr. Vekselberg found it difficult to predict when this issue will be resolved. Dmitry ANDREEV, St. Petersburg |
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