SUAL Refused from Apatite
// After switching Pikalevskiy Alumina from nephelines to bauxites
Raw materials’ independence
Yesterday Yevgeny Isakov, General Director of the branch SUAL’s Pikalevskiy alumina plant - SUAL (PGZ), told Kommersant that starting in October the enterprise refuses from the collaboration with Joint Stock Company Apatite (belonging to the group Fosagro AG). PGZ switches to new production technology of alumina: instead of nephelines, supplied by the Apatite, it will be processing bauxites, which belong to SUAL’s affiliate - "Bauxite of Timan." According to Kommersant information, the switch to the new technology would cost SUAL about $50 or $60 million. And "Apatite", for which the PGZ was the single user of nephelines, would have to build its own alumina plant, which would cost more than $300 million.
"Apatite" (Murmansk Region, part of the group Fosagro AG) is the largest producer in Russia of apatite concentrate (8.5 million tons in 2004) and the only producer of sellable nephelinic concentrate (1.071 million tons in 2004); nephelinic concentrate is the waste product of Apatite and it is used for production of alumina and in chemical industry). Until recently, Apatite was selling the entire nephelinic concentrate to Pikalevskiy alumina plant.
In 2004 Pikalevskiy Alumina became a part of "SUAL- holding" and it was made a branch of Pikalevskiy aluminum plant - SUAL. PGZ produces alumina, soda, potash, and carbonate lye. Such large companies as Metakhim, part of Sevzapprom, and Pikalevskiy Cement, which is part of Euro-Cement Group, are consumers of the PGZ chemical production.
Yevgeny Isakov, General Director of PGZ, told Kommersant that in October the enterprise will completely switch to new technology of alumina production. This technology allows to refuse from the consumption of nephelinic concentrate, which until recently was supplied to PGZ by the Apatite." Also, PGZ intends to process the bauxites from Sredne-Timan bauxite mine (Joint Stock Company Bauxite of Timan). "We completed the testing of the sintering furnace on PGZ, which will allow us to switch completely to Timan’s bauxites,", - SUAL- Holding confirmed yesterday.
Let’s remind that SUAL came to this decision after the conflict with Apatite – the only supplier of raw materials. The Apatite wanted to double the price of the nephelinic concentrate (up to $44 per ton). SUAL refused to buy the concentrate for such price. The negotiations failed to reach agreement.
SUAL refused to name the amount of the investment, which would be necessary for switching PGZ to bauxite production. The experts estimate the raw material independence of PGZ at approximately $50 or $60 million.
Apatite management refused to comment on the loss of its only consumer. The only solution for the company is to build its own alumina plant. According to Kommersant information, Apatite already considered building such a plant with the capacity of 1 -1.5 million ton of alumina per year. (The average cost of this project is about $300 per ton of alumina).
In the mean time, PGZ’s switch to bauxites left several regional cement and glass producers without the raw material. As Kommersant learned in Euro-Cement Group, the company would have to switch Pikalevskiy Cement for the limestone processing, instead of nepheline, because the cement production is becoming much more energy consuming.
by
Maria Cherkasova; Alexandra Gritskova, St. Petersburg
All the Article in Russian as of Sep. 20, 2005
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