Kazakh Aluminium Smelter seals six-year agreement for €3 MM

<p>Natural resources firm Eurasian Resources Group (ERG) has entered into an agreement with financial services firm VTB Group to finance a six-year aluminium supply worth an estimated &euro;3 million (US$3.3 million).<br /><br />VTB Capital has reportedly already released an advance payment for the purchase of 660,000 metric tons for the life of the loan to supply Kazakhstan Electrolysis Plant (KEP) in Pavlodar. VTB Capital has already entered into additional long-term contracts for sale of the metal in question to end users.<br /><br />According to reports, the parties have developed a hedge strategy to protect them against potential drops in the aluminium market by fixing a floor for the sale of the metal in the contract. Accordingly, KEP will not sell below a particular price within certain corridors in order to stabilize its cash flow.<br /><br />&ldquo;This deal is the first long-term financing of the Kazakhstan Electrolysis Plant ensuring the stability of the enterprise and guaranteed markets products throughout the term of the agreement,&rdquo; said CEO of Eurasian Resources Group Benedict Sobotka. &ldquo;We are the only aluminium producer producing the metal of the highest grade in Kazakhstan.&rdquo;<br /><br />Senior Vice President of VTB Bank and the chief of the bank&rsquo;s credit department Vitaly Buzoverya indicated that the firm has made the commodities markets a priority.<br /><br />&ldquo;The deal will further strengthen our position in the commodities segment,&rdquo; she explained. &ldquo;Our work strategy in this market involves expanding the range of goods and services provided by VTB customers.&rdquo;<br /><br />KEP is listed on the London Mercantile Exchange, and its nameplate capacity is 250,000 metric tons per annum. The plant has optimized its efficiency in recent years, cutting consumption of electricity for electrolytic aluminium by 1.4 percent below the standard and 2.7 percent below the project value.<br /><br />VTB Group is a provider of financial services made up of over two dozen credit institutions and financial firms operating in several markets. The Russian government is the firm&rsquo;s majority shareholder, holding 60.9% of all voting shares.</p>