Aluminum Klondike

American Alcoa is exploring the Far East

The Russian Far East turned out to be of interest not only to domestic aluminum producers (primarily RUSAL and SUAL), who plan to build factories there and are now looking for sites. The Khabarovsk Territory attracts them with its proximity to one of the promising markets - China, and also has an important advantage over other regions - access to the sea and satisfactory river navigation along the Amur. Moreover, the region is located in a favorable climatic zone and has a developed transport infrastructure. In this regard, the American Alcoa, which is now a world leader, decided to study the possibility of building an aluminum smelter in the Khabarovsk Territory. A company delegation led by commercial development manager Lawrence Kastner visited the Khabarovsk Territory yesterday and discussed the prospects for building the plant with the first deputy chairman of the regional government, Vladimir Popov. During the meeting, ITAR-TASS reports, the possibility of constructing an enterprise in the region for the production of primary aluminum, designed to produce 300-350 thousand tons of metal per year “with a subsequent increase in its capacity if the energy resources of the region allow,” was discussed.

Energy supply, as is known, is (along with convenient access to ports and the availability of sufficient labor resources) one of the key conditions for the construction of Alcoa enterprises. After all, several years ago SUAL invited Alcoa to participate in the Komi-Aluminium project, but then the American company refused to partner in the project, citing the lack of long-term (at least 20 years) energy supply agreements. And one can hardly expect that such a contract can be obtained in the Khabarovsk Territory. At the same time, the Far East is apparently more attractive for Alcoa than the Russian north, so it is quite possible to expect that the company will decide to build a plant even in the absence of long-term contracts for the supply of electricity. The fact is that we are talking about gaining a share of the Chinese market, which may go to Russian competitors.

Representatives of the Khabarovsk Territory suggested that Alcoa consider three sites for the construction of the plant. The first is the port of De-Kastri on the coast of the Tatar Strait. It is interesting because it is located near the transit gas pipeline from Sakhalin to Khabarovsk with a capacity of 4.5 billion cubic meters of gas, which is being built under the Sakhalin-1 project. Mr. Popov, apparently hinting at the possibility of using gas from the named project, mentioned that the aluminum smelter, which will consume approximately 540 MW of electricity, will require 500 million cubic meters of gas per year. The second site is in Komsomolsk-on-Amur, 400 km from the seaport of Vanino. Mr. Popov assured that there is sufficient energy capacity potential here too. And the third option is in close proximity to the port of Vanino. But the disadvantage of this site is the lack of nearby energy capacity sufficient to support aluminum production. Therefore, if Alcoa chooses this site, it will need to build 800 km of power lines, which will cost $160 million. However, this site reduces the company's logistics costs.

Neither the Alcoa delegation nor representatives of the regional administration said how much the construction of the entire aluminum complex might cost. Nevertheless, it is obvious that competing companies will try to do everything in their power to prevent Americans from entering the Far East and the Chinese market. This, by the way, may be facilitated by the bill currently being developed on the access of foreign companies to strategic industries, according to which Alcoa may be forced to create a joint venture with a Russian structure and a non-controlling stake in it.

Anna LANDER