On the hills of Manchuria

SUAL may build an aluminum smelter in the Far East together with Hydro and HydroOGK

The SUAL Group, the Norwegian Hydro Aluminum and JSC HydroOGK yesterday signed a memorandum of understanding on the implementation of energy projects in the Far East. We are talking about cooperation between companies to supply energy to an aluminum smelter that SUAL and Hydro Aluminum can build in this region. However, a government source says that it would be more logical if HydroOGK, as a future government agency, implemented projects that involve the use of excess electricity on a tender basis with the involvement of all interested companies. According to Vremya Novostei, RUSAL is also interested in the Far Eastern region.

The fact that the Far East is included in the sphere of attention of SUAL first became known at the end of June, when the head of the administration of the Amur region, Leonid Korotkov, announced that SUAL and Hydro Aluminum were considering the possibility of creating aluminum production in the region. The EBRD also showed interest in the project, which, in particular, is participating in financing the joint project of SUAL and RUSAL - Komi-Aluminium. To build an enterprise in the Far East, SUAL considered sites in the area of ​​Zavitinsk, Khabarovsk, Komsomolsk-on-Amur and the port of Vanino. The local administration assumed that by October of this year the company would decide on the construction site, AK&M reports. If a new aluminum smelter is built on the Amur, its main markets will most likely be Southeast Asia and China - the most convenient from a logistics point of view. Since these are growing markets, the project participants received a foundation for the future.

“The new aluminum smelter could become one of the consumers of electricity from Far Eastern hydroelectric power plants, the construction projects of which are currently being studied by HydroOGK,” the companies said in a joint statement. The Bureyskaya HPP, Nizhnezeyskie and Nizhnebureyskaya HPPs, and hydroelectric power stations of the South Yakutsk hydropower complex are considered as potential energy sources. The annual needs of the plant, whose capacity will be 600 thousand tons of primary aluminum per year, are estimated at 9 billion kWh. This is more than 20% of the current output of the entire Far Eastern energy system. One of the main conditions for the implementation of the enterprise construction project is a long-term contract for the supply of electricity, say the participants in the memorandum. If they manage to agree on the implementation of a joint project, appropriate agreements will be concluded.

However, SUAL still notes that the construction of an enterprise in the Far East is only one of the options that can be implemented as part of a project to double aluminum production by a company called Voskhod. The head of SUAL’s public relations department, Alexey Prokhorov, told Vremya Novostey: “We are studying the possibility of building new capacities for the production of primary aluminum in connection with the energy capacities available in the Far East. The implementation of these plans is possible within the framework of the strategic project "Voskhod", which involves doubling the volume of metal production (now SUAL enterprises produce 1 million tons of primary aluminum per year - Ed. ) within five to seven years. It is premature to talk about the configuration and details of the project until the investment justification is worked out.” According to him, the signing of the memorandum does not mean that the Far Eastern region is preferable to others being considered for the construction of the plant. SUAL previously spoke about the possibility of building facilities, in particular, in the Irkutsk, Murmansk and Sverdlovsk regions. But each time it was emphasized that the company had not yet decided on the construction site.

The signing of a memorandum with Hydro and HydroOGK in SUAL is still considered only as a preliminary step. “This only means that the three parties who signed the memorandum have a mutual interest in the implementation of the project, the key condition of which, as usual, is the availability of electricity. And HydroOGK’s participation in the project means that we are interested in long-term contracts for the supply of electricity at competitive prices,” says Mr. Prokhorov. “It’s too early to talk about details.” He did not rule out that if the project is approved and a decision is made to implement it, the company will consider various options for cooperation with partners under the memorandum, including one similar to the one that HydroOGK is implementing jointly with another Russian aluminum company - RUSAL - on Boguchanskaya HPP (they are completing the construction of both the power plant and the plant on a parity basis. - Ed. ).

Anna LANDER