World Mining Exploration News

UC Rusal, Vietnam’s an Vien to Cooperate in Setting Up Bauxite, Alumina Complex

United Company RUSAL, the world’s largest aluminum and alumina producer, has signed a memorandum of understanding with Vietnam’s An Vien to create a vertically integrated bauxite and alumina complex, UC RUSAL said in a statement.

“The project will include the construction of an alumina refinery with a capacity of approximately 1.5 million tonnes of alumina per annum based on Binh Phuoc, one of the most promising bauxite deposits in South Vietnam,” the statement says.

Vietnam has the world’s third largest explored reserves of bauxites exceeding 3 billion tonnes. The bauxite reserves of Binh Phuoc deposit are approximately 700 million tonnes. The parties are currently discussing the possible parameters of the joint venture, the statement says.

In 2009-2010, the companies are planning to conduct exploration and a preliminary feasibility study, upon the results of which the project’s parameters will be specified. The construction of the bauxite and alumina complex is scheduled to begin in the first quarter of 2012, it says. Experts say the project could be worth about $1 billion.

This joint project is part of a wider program to develop cooperation between Russia and Vietnam, which is overseen by the intergovernmental committee of the two countries. The memorandum was signed in the presence of Russian President Dmitry Medvedev and Vietnamese President Nguyen Minh Triet during the latter’s official visit to Russia.

Commenting on the memorandum, UC RUSAL CEO Alexander Bulygin said: “The Asian-Pacific region will play an important role in UC RUSAL’s business development. This MOU on construction of a bauxite and alumina complex is part of our strategy to expand our raw materials base. Core to this strategy is the creation of technologically-advanced and modern production capacities and continuing to strengthen our position in regions with the fastest growing economies. The cooperation of UC RUSAL and An Vien is a solid example of international cooperation that facilitates both business development and national interest.”

The Vietnamese media reported in September 2007 that UC RUSAL was in negotiations regarding the construction of a bauxite-mining and alumina-refining complex in Vietnam. Artyom Volynets, RUSAL’s strategy and corporate development manager, visited Vietnam in August and met with the country’s prime minister, Nguyen Tan Dung, who said Vietnam was keen to develop its aluminum industry. UC RUSAL, however, was unable for a long time to reach an agreement on the deal since the Russian company wanted a controlling stock interest stake in the project.

The share ratio in the project is new known and the companies are still discussing this issue, UC RUSAL told Interfax.

RUSAL opened a representative office in Vietnam in May this year. “UC RUSAL enforces its presence in global markets and actively seeks opportunities to strengthen its raw materials base and secure the competitive energy supply required for the construction of greenfield aluminium smelters. Vietnam huge energy potential and rich bauxite resources present significant opportunities for UC RUSAL to develop new energy and metals projects and create a full production cycle, from bauxite mining to the production of primary aluminium and alloys,” the company said at the time.