UC Rusal, CPI Sign MoU For Guinea Bauxite, Alumina Complex

LONDON (Dow Jones)- UC Rusal has signed a memorandum of understanding with China Power Investment Corp., or CPI, to build a bauxite-alumina complex in Guinea and an energy and metal complex in China, the Russian aluminum company said Monday.

The aluminum smelter will be located in Qinghai Province, China and will have a minimum production capacity of 500,000 metric tons a year. The smelter will secure its energy supply from CPI’s hydropower facilities on the Huang He River. The Guinea bauxite-alumina complex will have a capacity up to 2.8 million tons of alumina a year.

The two projects will create a vertically integrated aluminum production complex. Rusal will hold a stake of up to 49% in the Chinese aluminum smelter, and CPI will hold up to 49% of the Guinea bauxite-alumina complex.

The parties will finance the projects in proportion to their ownership and will create a working group to conduct an audit and feasibility study, planned to be completed by mid-2008. The joint project may commence in 2009, Rusal said.