Rusal Joins Forces with Chinese Co.
Russian Aluminum has announced the formation of a joint venture with the state China Power Investment Corp., one of the five largest electric companies in China, that will create a bauxite mine in Guinea and build an aluminum plant in China. Experts say the project, announced yesterday, will cost $2-3 billion. The bauxite mine is likely to be based on the Dian Dian deposit in Guinea, which Rusal owns. It produces 2.8 million tons per year. The plant will probably be located in Qinghai Province and have a capacity of 500,000 tons per year.
According to official Rusal spokesman Vera Kurochkina, Rusal will own over 51 percent of the bauxite mine, while CPI will have the majority in the aluminum plant. The cost of production at the aluminum plant, given the lower cost of Chinese labor, is expected to be about $500 per ton. Observers note that the joint venture's guaranteed access to electrical power is a big advantage in the project, since an energy shortage is predicted to hit China in 2009 or 2010 and have a deleterious effect on Chinese aluminum production. Last year, aluminum production in China increased by 2.991 million tons.
CPI operates several hydroelectric plants on the Huang He (Yellow) River. It has a capacity of 37,800 MW, 24.4 percent of which comes from hydro power. The companies receipts in 2006 amounted to $6.69 billion, and its gross profit was $544 million.
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All the Article in Russian as of Feb. 05, 2008
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Photo: Reuters
