Global Alumina: Refinery Project Costs Rise To $4.3 Billion

Global Alumina Corp. (GLAU.U.T) said the estimated cost to complete the construction of the Guinea Alumina refinery project in the Republic of Guinea has increased 35% to $4.3 billion from $3.2 billion.

The St. John, N.B. aluminum company said the increase is a result of the decline in value of the U.S. dollar, a rise in the cost of diesel and fuel oil, increases in bulk construction materials, higher labor costs and the increasingly heated market for industrial equipment and construction services.

The company said as a result of higher forecasted aluminum prices and broader interest in providing debt financing to the project, the project’s debt capacity is expected to increase to $2.5 billion from $2 billion.

The company plans to further optimize the refinery by increasing its production capacity by an additional 100,000 metric tons to 3.3 tons a year for the first two processing lines. The schedule to complete the feasibility study for the project has been extended to the middle of March from the end of December 2007.

The refinery is being developed by Guinea Alumina Corp., a joint venture among Global Alumina, BHP Billiton Ltd. (BHP), Dubai Aluminium Co. and Mubadala Development Co.