Aug 29 2006
SUAL Group and Nurenergoservice LLP (a Kazakhstan subsidiary of AES Corporation) signed a Memorandum of Understanding relating to cooperation on the energy supply for a new aluminium smelter in the Republic of Kazakhstan, the potential construction of which is currently under consideration by SUAL Group.
The Memorandum records the principal understandings reached between the parties in relation to a future agreement on the power supply for the new aluminium smelter from the Ekibastuz GRES-1 power station for a period of 20-30 years. Pricing under this agreement will be partially linked to the LME price of aluminium. The annual demand of the new smelter, which has a prospective capacity of 500 thousand tonnes of primary aluminium per annum, is estimated to be approximately 7.48 billion KWh.
AES is guaranteeing a supply of energy with economically viable future pricing, which is one of the key elements required prior to the construction of new aluminium smelters, due to the high power consumption of the aluminium production process.
In terms of the Memorandum, shortly after signature, SUAL Group will initiate a pre-feasibility study on the construction of the new aluminium smelter. It is anticipated that the pre-feasibility study will be finalized within six months.
In the event that the outcome of these negotiations is positive, and depending upon the results of the pre-feasibility study, the parties plan to conclude a legally binding agreement relating to this potential project and to commence preparation of the feasibility study and construction of the project.