Translated material
Chinese campaign
RUSAL will build an energy and metallurgical complex together with CPI
The United Company RUSAL, which has recently established its position as the world's largest producer of aluminum and alumina, intends to expand its geography . This time - in the direction of China. In this country, RUSAL, together with one of the largest Chinese electric power companies, China Power Investment Corporation (CPI), plans to build an energy and metallurgical complex. In exchange, the aluminum company will allow its Chinese partner to participate in a project to build a bauxite-alumina complex in Guinea with a capacity of 2.8 million tons of alumina per year.As part of the memorandum signed by the parties, RUSAL also intends to become a partner of CPI in a project to construct an aluminum smelter with a capacity of 500 thousand tons per year, located in China in the Chinhai province, which will be supplied with electricity from a cascade of CPI hydroelectric power stations on the Yellow River. CPI is one of the largest energy corporations in China with a total generating capacity of 37.8 thousand MW, of which 24.4% are hydroelectric power plants, 72% are thermal power plants and 3.6% are nuclear power plants.
As a result of the partnership on these two projects, RUSAL said in a statement, “a vertically integrated aluminum production complex is being created.” It is assumed that RUSAL will receive up to 49% in the aluminum smelter, and CPI - up to 49% in the bauxite-alumina complex. Project financing is carried out by the parties in proportion to their ownership shares. True, RUSAL has not yet named their costs, only noting that a working group must first be formed to conduct an audit and feasibility assessment of the joint project, which is planned to be completed by mid-2008, and the project itself to be launched in 2009. At the same time, experts estimate such projects at $1.5-2 billion.
China is today the fastest growing market in terms of aluminum demand, increasing by 20% annually. Therefore, as Vera Kurochkina, director of public relations at RUSAL, explained to Vremya Novostey, “in connection with the expected closure of a number of capacities in China, associated both with the high price of coal (most of the power plants that supply electricity to aluminum smelters operate on it), and and with the tightening of environmental requirements for Chinese manufacturers, we are opening up a very promising market for ourselves both in terms of sales and in terms of creating aluminum production facilities powered by hydroelectric power using modern production technologies.” Until now, RUSAL only had a cathode plant in the region, which produced 15.5 thousand tons of products last year.
Analysts say the cooperation is beneficial for both companies. China now consumes about a third of all aluminum in the world, and it would be logical for a world leader in this area to finally come to the region. At the same time, aluminum production is very energy-intensive, so all plants are focused on the proximity of electricity supply. RUSAL was no exception. The main competitors of the Russian holding - Rio Tinto Alcan and Alcoa - have been operating in the region for a long time. True, according to experts, given the appetites of the Celestial Empire, a new player there will not be superfluous.
The deal for RUSAL to acquire 25% plus one share of MMC Norilsk Nickel from Mikhail Prokhorov's Onexim group will be closed in two to three weeks , Norilsk Nickel CEO Denis Morozov said yesterday. After this message, Norilsk Nickel shares accelerated their growth. Thus, on the MICEX Stock Exchange their price soared by 16.30 Moscow time to 6.53 thousand rubles. per piece, which is 6.3% higher than last Friday and almost corresponds to the cost of mid-January (6.60 thousand rubles), when the entire Russian market rushed down under pressure from Western sales. INTERFAX