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[April 2003]
Agreement for Joint Development of Russian Alumina Project
Aluminium Pechiney (Paris, France) and SUAL (Moscow, Russia) have announced that they have reached agreement to enter into substantive negotiations for the joint development of a bauxite, alumina and aluminium complex in the Komi Republic in Russia.
Following agreement, both companies will undertake the necessary studies regarding the project to develop a new 1.4 million tonnes per annum alumina refinery and smelter with the capacity of up to 500,000 tonnes per annum. SUAL's existing Timan bauxite deposit and its Timan railroad will be used as the resource base and transport infrastructure for the Komi complex.
Subject to successful negotiations and to achieving favourable results from the technical, environmental and financial studies, the project will be developed and implemented jointly.
As a next step, the parties will enter into negotiations to agree terms and finalise the framework of their cooperation to formalise the joint venture structure. The negotiations envisage SUAL retaining a controlling stake in the project and Aluminium Pechiney acquiring a substantial equity interest up to 35% to 40% of the existing project company, currently wholly owned by SUAL.
The technology, process routes and the optimum layout and size of the project will be determined in the course of a bankable feasibility study, due to commence shortly. If the conditions allow it, the project company will have the right to use Pechiney's technology, including the AP 50 smelting technology.
"This initiative, associating SUAL, the second primary aluminium producer of Russia with the expertise of Pechiney in alumina and primary aluminium technologies creates a real opportunity for Pechiney to build a future collaboration with the Russian aluminium industry," said Jean-Dominique Senard, member of the Executive Committee of Pechiney, head of the Primary Aluminium Sector.
"I am pleased that we have reached this stage of negotiations and look forward to building upon this cooperation to jointly develop the Komi project," said Chris Norval, President of SUAL Holding.
ENDS