Rusal To Sell Pikalyovo Alumina Refinery To BasEl Unit

MOSCOW (Dow Jones)-Russia’s United Co. Rusal Friday said it would sell its Pikalyovo Alumina Refinery in the northwest of the country to a unit of Basic Element, or BasEl, for an undisclosed sum.

Rusal, the world’s largest aluminum and alumina producer, said the refinery became unprofitable in 2006 due to rising nepheline concentrate prices, while a technical audit conducted in 2007 concluded that opportunities for converting it into other core products should be explored.

BasEl -controlled by tycoon Oleg Deripaska, who is also Rusal’s majority owner -will convert the facility into a cement production center.

BasEl plans to invest $83 million in restructuring Pikalyovo. As a result, the plant is expected to produce around 1.8 million metric tons of cement a year.

Much of that output will meet the high demand from the construction industry in St. Petersburg, Rusal said.