Rusal puts long-stalled Taishet aluminium project back on track

Russia’s UC Rusal has resumed construction at its long-stalled Taishet aluminium smelter project site in Siberia. The second largest aluminium producer of the world after China Hongqiao expects the global aluminium deficit to widen in the range of 1.7-1.8 million tonnes in 2018 from the current 1.3 million (+500,000 tonnes). Taishet aluminium smelter, on completion, would help to address this deficit to a large extent, Rusal Deputy Chief Executive Oleg Mukhamedshin believes.

The global aluminium price is estimated to stabilise around US$1,900 per tonne in 2017, Mukhamedshin added.

Rusal had invested US$800 million in Taishet smelter project before it was stalled years ago. In current scenario, the company needs a further US$700 million to complete the project, expectedly by 2020. It is in talks with banks including state-run Vnesheconombank to finalise financing by the end of the year.

In an interview with the media, Mukhamedshin said that Hong-Kong listed Rusal would consider placing a new tranche of its Chinese yuan-denominated Panda bond, depending on market conditions. The aluminium producer placed a debut tranche in March.

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The first line of Taishet aluminium smelter will have a production capacity of 430,000 tonnes per annum. A 50-50 joint venture with state-controlled power company Rushydro is also being considered to ensure uninterrupted power supply to the smelter.

Commenting on the long-awaited construction resumption Mukhamedshin said, "In this respect, we have a large competitive advantage related, above all, to the fact that we have resumed the Taishet aluminium smelter construction."

Rusal is also planning to expand annual capacity at its Boguchansk smelter in Siberia to 298,000 tonnes by 2018, up from 149,000 tonnes, reported reliable industry sources.