the international cooperation

OJSC Russian Aluminum (Rusal) announced plans to build a power plant in the Australian state of Queensland. It will supply the aluminum plant that the company plans to build in this state, and part of the energy will end up on the Australian market. The final parameters of the project will be clarified within a few months by a working group created by Rusal and the Queensland authorities. According to industry experts, the plant and station will cost the company approximately $4.5 billion. This is more than half of the total investment that Rusal has planned until 2013.

Yesterday, Rusal CEO Alexander Bulygin signed an agreement with the head of the Queensland government, Peter Beattie, to create in the near future a working group for the construction of new energy facilities in the state. In accordance with the document, the group will determine how much generation will be needed for Rusal's new aluminum smelter in the state and how much it will cost to build the power plant.

The capacity of the future plant at Rusal has not been announced, but it is known that it will operate on raw materials supplied from the Queensland Aluminum Ltd (QAL) alumina refinery. At the beginning of the year, the company acquired a 20% stake in QAL, and annually it will have 770 thousand tons of alumina or about 360 thousand tons of aluminum at its disposal. Previously, the company also announced its interest in the Australian bauxite deposit Aurukun, but yesterday Rusal spokeswoman Vera Kurochkina told Kommersant that the new plant will process alumina, which the company receives from QAL. It is also possible to purchase raw materials from other companies. Thus, the capacity of the new aluminum smelter will be 360 thousand tons or more.

Rusal does not undertake to estimate the cost of the new power plant. The company only clarified that we are talking about a station running on coal or gas. According to analysts' calculations, the construction of 1 kW of power of such a station costs $500-600. To produce a ton of aluminum per year requires 17 MW of electricity. According to Aton analyst Dmitry Scriabin, the power plant could cost Rusal $3 billion. At the same time, the company will be able to make additional money by selling excess electricity on the market. “I don’t think that more than 20% will remain unused energy,” noted Mr. Scriabin. “However, electricity prices in Australia are at least three times higher than in Russia.” Experts estimate the cost of the aluminum smelter at $1.5 billion.

Despite the fact that generation will cost the company twice as much as the plant, Metropol news agency analyst Denis Nushtaev considers these investments to be completely justified. “It is more profitable to process raw materials in Australia than to transport them here,” Mr. Nushtaev is sure. “However, Rusal will need to hedge its bets by fixing prices for finished products and concluding long-term sales contracts.”

Rusal stated that it would finance the entire plant independently, from its own or borrowed funds included in the investment program, without involving third-party partners. Let us note that by 2013 the company plans to invest $8 billion in production development. It turns out that the Australian project could take up more than half of Rusal’s investment program.

EKATERINA Kommersant-GRISHKOVETS

Rusal will illuminate Queensland