President of the group of companies "Siberian Aluminium" Oleg Deripaska takes part in the round-table conference with participation of the chancellor of Germany Gerhard Shreder and representatives of business circles of Russia and Germany. This session was held in "President-hotel".
Photo: Dmitry Azarov
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Rusal Rushes into Shopping
// $1 billion on foreign assets
Yesterday, Russian Aluminum published its investment program for the year 2005. Two thirds (that is $1 billion) will be spent on foreign aluminum assets purchase. Getting a concession or purchasing together with an American partner of the unfinished electric power station in Congo, and purchasing of the aluminous industries in Australia.
Rusal’s CEO introduced the plan of the company for the year of 2005 to the journalists. Judging by his speech, the priorities of the holding will be changed. Last year they paid more attention to raw material sources expansion, decreasing of expenses, acquisition of the minority shares of the enterprises that are members of the group. Particularly, they bought the block of shares of Krasnoyarsk Aluminum Plant (KrAZ). This year Rusal is about to buy foreign assets.
Bulygin thinks that the investment volume will reach $1.5 billion on 2005. Last year the investment program was just $500 million. Some $500-600 million will be spent on modernization of the present powers (KrAZ and aluminous Friguia in Guinea). Another $0.9-1 billion will be spent on new purchases. “The process of consolifation in the field is not over yet. We’re trying to buy everything that is on sale (on the world market of aluminum industry- Kommersant)”- head of Rusal said yesterday.
In 2005 the company shall have to finish the last year bargain on acquisition of the 20 percent o the aluminous plant Queensland (QAL, Australia). Rusal will have to pay for the papers and also pay it’s former owner’s debts. Kaiser Co. some $411 million. According to Bulygin, Russal wioll get not a single ton of alumina from Australia- is has long-term contracts with Kaiser. The first supplies of the raw material are expected by the end of 2005.
In the end of the first quarter Rusal is inclined to finish concordance of the agreement on the building of the aluminous complex in Venezuela (Guyana deposit). Bulygin said yesterday that the only obstacle in finishing the negotiations is the question of the legislative registration of the rights to bauxite mining. Let us remind that according to preliminary conditions of the group joining the Venezuelan project Rusal gets the right to mine workings for 30 years. The company is engaged to build an aluminous plant producing a primary aluminum and start the factory producing a building constructions. The preliminary evaluation of the power of the future enterprise is some 600.000 tons of primary aluminum. The total cost of the project may be $1 billion (Komersant of 20.12.2004 The company may invest another $1 billion in a project on bauxite mining in Guyana in 2007.
Rusal is intended to finish the project of completion of hydroelectric power station in Democratic Republic of Congo and building an aluminous plant nearby. Bulygin declared the company plans in Congo for the first time. According to him the two options are under consideration: to take hydroelectric power station into concession or buy it. As Kommersant wrote on August 3, 2004, it’s all about Inga hydroelectric power station. Its power is estimated as of 1225 MWt. It may produce 3500 MWt later. But it’s too risky. Congo is very unstable in political sense. And the cost of the project is some $1.5-1.8 billion. So presently Rusal negotiates with an American company on the establishing a joint venture in Congo. Bulygin refuse to give the name of the future partner, but made a remark that it;s not Alcoa that Rusal used to work together.
Oleg Deripasla, former owner of Rusal declared a year ago that up to 2010 the investments to assets acquisition would have increase up to $2 billion. Now that another plans has been declared, Rusal will have to make corrections in the long-term investment program: by the beginning of 2006 the company would have spent more than $1 billion on the new assets. And the realization of the projects that Rusal declared about yesterday may cost more than $3 billion..
Maria Molina
All the Article in Russian as of Jan. 28, 2005
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