Apr 26 2005
RUSAL and SUAL Group signed an Agreement that will make them equal partners in the Komi Aluminium Project. The Agreement defines the terms of reference for joint implementation of the second stage of the project to build an alumina refinery with an annual capacity of 1.4 million tonnes in the Komi Republic.
The Komi Aluminium Project involves the development, construction, and operation of a modern bauxite-alumina complex in the Komi Republic. It will use the abundant resources of the Eurasia’s largest Middle Timan bauxite deposit, with proven reserves of 260 million tonnes of ore. The project will see an increase in annual bauxite extraction at the Middle Timan bauxite deposit from the current 1.5 million tonnes to over 6 million tonnes of bauxite by 2008. An alumina refinery in Sosnogorsk will be built with an annual alumina production capacity of 1.4 million tonnes.
The extensive reserves of the Middle Timan bauxite deposit together with a well developed transport infrastructure, which will allow to transport annually up to 8 million tonnes of freight, make the «Komi Aluminium» complex one of the largest raw material bases in Eurasia. The project’s implementation will double the share of domestic raw materials consumed by Russian producers from 40% to 70-80%.
The site for the alumina refinery is located 12 km from the city of Sosnogorsk. A total of USD 1.2 billion will be invested into the project. Under the Agreement between RUSAL and SUAL Group, the financing will be made on a parity basis by means of debt and shareholders’ capital. Refinery is scheduled to launch in 2008.
«My vision is that RUSAL and Sual, joining their efforts for the first time, are creating a serious platform for strengthening the position of the Russian aluminium sector in the international arena,» Alexander Bulygin, RUSAL’s CEO, said. «The partnership of our two companies in implementing such a large-scale project demonstrates that the Russian aluminium industry is maturing. At the same time, this agreement helps each of our companies address important challenges in their respective strategies.»
‘I am delighted that RUSAL has become our partner in this project, one that is of vital importance to SUAL,’ said SUAL Holding President Brian Gilbertson. ‘It is a major step forward in the consolidation of the Russian aluminium industry that creates new possibilities for further co-operation between two major Russian aluminium producers.’
The parties have formed a joint Steering Committee to manage the project. The composition of the Committee is on a 50/50 basis. The Committee is headed by ZAO Komi Aluminium President Vladimir Kremer. ‘We have created a joint venture that will further develop the project. The integration of the qualified resources and joint experience of the two leading companies will contribute immensely to its success’, said Vladimir Kremer.
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