RUSAL woos Chinese investment in Siberia
MOSCOW/JAKARTA (Reuters) - Russia's RUSAL (0486.HK), the world's largest aluminum producer, wants Chinese companies to consider investing in new smelting projects in Siberia, a senior executive of the metal company said.
China, which accounts for 44 percent of global aluminum consumption, needs to invest in new production projects to meet increasing demand over the next 5 to 10 years, Oleg Mukhamedshin, head of RUSAL's equity and strategic development, told a Metal Bulletin aluminum conference in Moscow on Friday.
"RUSAL proposes that China considers Siberia as an alternative (to domestic projects)," Mukhamedshin said.
Siberia has the benefit of access to hydro energy as well as proximity to China, while RUSAL, controlled by businessman Oleg Deripaska, has bauxite resources and alumina capacity, Mukhamedshin said. Delivery from Russia's Far East ports to Shanghai takes from four to eight days.
A number of Chinese firms are already planning smelters or processing projects in Indonesia, Southeast Asia's largest economy, with a total anticipated spending in excess of $9 billion agreed to in August.
China is the world's largest consumer and producer of aluminum, with Indonesia supplying about 80 percent of the 25 million tonnes of bauxite it bought in the first half of 2012.
In 2007, RUSAL signed a memorandum of intent with Indonesian Antam with a plan to create a complex, which would produce about 3.6 million tonnes of bauxite per year and about 1.2 million tonnes of alumina, but the plan was postponed due to the global economic crisis.
RUSAL has now dropped the plan to build the complex in Indonesia, its press office said by email on Friday.
But Indonesia's industry minister said earlier on Friday he was still expecting RUSAL to push ahead with this long-delayed $1.5 billion alumina smelter project.
"(RUSAL) are going to realize their project in 2013 with total investment of $1.5 billion," Mohamad Hidayat told Reuters following a news conference in Jakarta.
"RUSAL is now looking for other local partners. They are also selecting several local bauxite mining companies as partners for raw material supplies."
Mukhamedshin also said on Friday RUSAL had delayed its Taishet aluminum project in Siberia for at least a year. On Thursday RUSAL said its Boguchany project, also in Siberia, would produce its first aluminum this spring, but expanding it further would depend on the market.
Three-month aluminum prices touched a three-year low at $1,827.25 a tonne in mid-August, after falling more than 10 percent in the second quarter.
RUSAL's Taishet project, which was expected to start producing aluminum in 2013 and eventually reach an annual capacity of 750,000 tonnes, can start production no earlier than in 2014, head of RUSAL's equity told reporters on Friday.
(Reporting by Polina Devitt and Yayat Supriatna; Writing by Andrey Ostroukh, editing by William Hardy)
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