RUSAL to start Khakassia aluminium plant on Dec 15

By Robin Paxton

MOSCOW, Dec 12 (Reuters) - RUSAL will launch aluminium production on Friday at its $750 million Khakassia smelter in Siberia, which will add 11 percent to capacity at the world's No. 3 producer of the metal used in drinks cans and cars.

The Khakassia smelter, the first aluminium plant built in Russia since the fall of the Soviet Union, will have capacity to produce 300,000 tonnes a year and expects to reach this target by 2008, RUSAL officials said on Tuesday. "The first stage of production will have capacity of 71,205 tonnes," said RUSAL spokeswoman Vera Kurochkina. The smelter will start operating its entire capacity in November 2007. RUSAL is merging with domestic rival SUAL to form a $25-30 billion world leader producing an eighth of global aluminium. Commodities trader Glencore will contribute alumina assets and an aluminium smelter in Sweden in return for a 12 percent stake.

SUAL owner Viktor Vekselberg told Reuters last month the merged company could place shares in London by the end of 2007. The Khakassia smelter, powered by the Sayano-Shushenskaya hydroelectric station on the Yenisei River, will employ about 1,000 people in the town of Sayanagorsk. RUSAL also operates the separate Sayanogorsk Aluminium Plant on the same site. An official at the smelter told Reuters this plant would exceed its 2006 production plan of 516,000 tonnes. "We think we'll produce more," the official said, without specifying the revised output target.

Yevgeny Zhukov, managing director of Sayanogorsk Aluminium, said in September RUSAL would invest $325 million by 2013 to raise capacity at the plant to over 545,000 tonnes a year.

NIGERIA SMELTER RUSAL, controlled by billionaire Oleg Deripaska, Russia's sixth-richest man, produced 2.7 million tonnes of aluminium in 2005 -- three-quarters of Russia's and 8.5 percent of world output.

The company plans to build two more smelters in Siberia, Taishet and Boguchany, and is in the closing stages of acquiring Aluminium Smelter Co. of Nigeria (ALSCON).

"We plan to complete a deal to acquire a controlling stake by the end of the year. Six months will be required to put the plant into production," said Kurochkina.

ALSCON has capacity to produce 190,000 tonnes a year. United Company RUSAL -- the product of the merger between RUSAL, SUAL and some Glencore assets -- will be able to produce 4 million tonnes a year of aluminium and 11 million tonnes of alumina, 16 percent of world production.

The enlarged company plans annual investment of $3 billion to $3.5 billion in the next five years and will raise aluminium output to between 5 million and 5.5 million tonnes, overtaking Alcoa Inc. (AA.N) and Alcan Inc. AL.TO.