SPecIAL - Alu-web.de

c o m p a n y n e w s w o r l d w i d e
Rio Tinto Alcan
aluminium smelting industry
Uc rusal plans ipo by end 2009
UC Rusal plans to make an initial public
offering (IPO) by the end of next
year as part of its efforts to clean up
Norilsk Nickel, according to the Russian
company’s head of strategy. The
plan for the long-awaited IPO comes
as the company looks to create a Russian
mining giant through its stake of
just over 25% in Norilsk. Two steps are
required: firstly, proper corporate governance
in Norilsk, a balanced board
with a truly independent director, and
professional management; and secondly,
a public listing should happen
before the end of 2009. A listing will
allow Rusal to discuss more openly
its corporate strategy, particularly its
plans for Norilsk. Rusal has not yet
decided where to make the IPO.
This choice may affect the amount
of cash the IPO raises, but Rusal believes
the strength of its strategy will
override any investor concerns. Rusal’s
focus on upstream operations, rather
than downstream, will also pay off. According
to the agreement that merged
Rusal, Sual and Glencore’s alumina
assets in March 2007, the aluminium
producer must list by March 2010.
Diversification does bring benefits,
including stable cash flow, by spreading
the risks across projects.
While Rusal seeks to diversify, it
is also looking at its existing operations
and has an ambitious expansion
plan: it expects to increase output to
4.8m tpy of aluminium within five
years through green- and brownfield
projects across the globe. Rusal bases
its confidence on market strength in
China, which will become a net importer
of aluminium, some claim for
as much as 5m tpy by 2015. ➝
Vedanta targets 2.6m tpy of aluminium by 2012
Vedanta Resources plans to invest
USD9.8bn to raise its fully-integrated
aluminium smelting capacity to 2.6m tpy
by 2012, and in the next three years will
become Asia’s largest aluminium producer,
and among the world’s top five. India is
positioned to become one of the world’s
largest producers of aluminium, with the
sixth-largest bauxite reserves at 2.3bn
tonnes and the fourth-largest coal reserves
at over 250bn tonnes. Of these, more
than 1.4bn tonnes of bauxite and 62bn
tonnes of coal reserves are in Orissa state,
where Vedanta is based.
The news of Vedanta’s expansion
came as it forecast that India’s aluminium
demand will continue rising. The company
believes that Indian consumption will
reach 3.3m tonnes by 2020, compared
with 1.2 m tonnes last year.
To capitalise on booming Indian
demand, Vedanta is setting up a 1.25m
tpy brownfield aluminium smelter with
a 1,980 MW captive thermal power plant
in Jharsuguda, Orissa (the Jharsuguda
II Project). It will also set up a 325,000
tpy aluminium smelter project with a
1,200 MW captive thermal power plant
in Korba, Chattisgarh state (the ‘Korba III
project’). Correspondingly, alumina production
capacity at Lanjigarh will be raised
to 5m tpy from 1.4m tpy.
The first three potlines at the Jharsuguda
II project will have a total capacity of
937,500 tpy, are set to produce first metal
by March 2010, and will be fully commissioned
by September 2011. The fourth potline
with a capacity of 312,500 tpy is due
to be fully commissioned by September
2012. The Korba III project, implemented
by Balco, will comprise a potline containing
336 cells. It is expected to produce
first metal by October 2010 and to be fully
commissioned by September 2011.
Alumina production capacity will
increase through de-bottlenecking the existing
1.4m tpy alumina refinery to achieve an
additional 600,000 tpy by March 2010 and
by building three new production streams
of 1m tpy each. The first stream is scheduled
for commissioning in mid-2010, and all
three streams should be completed by mid-
2011. Estimated investment in the aluminium
smelter projects amounts to USD5.65bn
for the Jharsuguda II project and USD2bn
for the Korba III project, over four years.
The total additional investment in Lanjigarh,
some USD2.15bn over three years, will come
from the balance sheet and debt.
Vedanta also hopes to start construction
of a 650,000 tpy smelter and a 1,500
MW power plant in West Bengal at a cost
of USD4.5bn in the next few months.
Vedanta restructures business
Vedanta Resources anticipates restructuring
its business into three groups, with
aluminium and energy assets operating
as Madras Aluminium Co. (Malco) to be
renamed Sterlite, while copper, zinc and
lead assets operate as Sterlite Industries
and iron ore as Sesa Goa. By changing its
corporate structure, Vedanta aims to simplify
its business, to increase efficiency and
to eliminate conflicts of interest across the
group. At the end of September Vedanta
Resources shelved the restructuring plan it
had unveiled just two weeks before, citing
poor investor reaction and the problems
gripping financial markets.
ALUMINIUM · 11/2008
71