RUSAL Expands Aluminum Reach in Australia

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Researched by Industrial Info Resources (Sugar Land, Texas). The world’s third largest primary aluminum producer, RUSAL, has agreed with the Queensland state government in Australia to set up a joint working group to develop power projects in the country. The newly formed group will provide the basis for the expansion of Rusal’s interests in Australia and for the potential development of a new aluminum smelter. The agreement was signed in the second week of June in Moscow by RUSAL’s CEO Alexander Bulygin and the Queensland State Premier Peter Beattie.

In 2005, RUSAL acquired 20% of Queensland Alumina, Limited (QAL) for $410 million. This gave the company 20% ownership in the Gladstone aluminum complex, which has the second largest alumina refinery in the world with an annual capacity of 3.8 million tons. The deal gave the Russian company an additional 770,000 tons of alumina per annum and an option to go up to one million tons. The Gladstone complex also has a dedicated 1,680-megawatt (MW) power plant. This deal expanded the company’s raw materials base by 22%. RUSAL also took over the $60 million debt held by Kaiser Aluminum, the former owner of the shares. The owners of QAL are Alcoa (NYSE:AL) (41.4%). (Montreal, Canada), Comalco Aluminium (NYSE:RTP) (38.6%) (London, United Kingdom), and RUSAL (20%).

In the same week, RUSAL announced that it could increase aluminum production by 150,000 tons, with the first batch of production coming from its new Khakassk plant. Construction on the 300,000 ton per annum (tpa) smelter was started in March 2005 and should be complete in November 2007, with the third phase coming into production. This $750 million project could see the company’s total aluminum output rise by 14%.

RUSAL produces 75% of Russia’s primary aluminum and about 10% of global production. In 2005, the company’s production of primary aluminum rose by 1.6% to 2.713 million tons and revenues were $6.1 billion. In 2005, capital investments rose 300% to $1.4 billion and they may hit $2 billion in 2006. The company is 100% privately held by Russian mogul Oleg Deripaska.

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