(Minews) - Russia's United Company Rusal Plc is exploring a joint project with China's top aluminium producer in Russia's Eastern Siberia, its deputy CEO told Reuters on Wednesday,
after the Russian aluminium giant shelved its original plans in March.
The possible tie-up with Aluminum Corp of China Ltd (Chalco) will be based on Eastern Siberia's rich mineral deposits, its hydropower potential and its closeness to China, said Oleg Mukhamedshin on the sidelines of a meeting of the World Economic Forum in China's northern city of Tianjin.
"We're considering a potential joint project in Eastern Siberia in Russia," Mukhamedshin said. "There's still quite visible stock in the market so it's not a project of the very short term, but in the medium term as the market will be in deficit, just to cover growing consumption, we'll consider this project."
Because of overcapacity in the global aluminium market and an ugly balance sheet, Rusal said in March this year that it had shelved Siberia plans for now. Rusal said in 2012 that it was looking for unidentified Chinese partners to develop a high-tech smelting plant in east Siberia.
In March last year, Rusal signed a memorandum of understanding with Chalco to replace outdated and high-cost production facilities in Eastern Siberia. This fits with China's hopes to replace old smelters to reduce pollution, despite the country's aluminium industry still being in overproduction, Mukhamedshin said.
Rusal also predicts this year's forecasted 1.5 million tonne global (excluding China) aluminium supply deficit will extend to 2017, Mukhamedshin said.
Last month, Rusal said it returned to profit for the first time in five quarters, and gave a bullish outlook for aluminium prices, driven by growing demand from carmakers and supply cuts outside China.
Rusal had earlier in the month completed a crucial restructuring of $5.15 billion in debt and has no payments due until January 2016. The deal gives it flexibility to pre-pay debt when cash flows are strong and pay less when London Metal Exchange prices fall.
