Rusal set to team up with Chalco to set up East Siberia smelter

According to Reuter’s report, Rusal Plc, world’s largest aluminium producer is proposing to enter into a joint venture with China’s top aluminum producer to start a project in Russia’s Eastern Siberia, as confessed by the deputy CEO of Rusal on Wednesday.

The proposed tie-up between Rusal and Chalco, two aluminium giants, will be primarily to explore the profitable locale of Eastern Russia with its rich mineral deposits, proximity to China and hydropower potential, Oleg Mukhamedshin declared while he was attending the World Economic Forum meeting in China’s Tianjin city.

Rusal had earlier shelved the Eastern Siberia project due to the global overcapacity of aluminium and the company’s poor balance sheets. However, they had expressed their interest of teaming up with Chinese partners to work on East Siberia way back 2012.

Mukhamedshin said that they had already signed the Memorandum of Understanding with Chalco last March to replace the outdated facilities in Eastern Siberia with high-cost production facilities. China shares the sentiment as they too hope to replace old pollution causing smelters despite the fact that the country is still in overproduction.

Now with Rusal returning back to profits earlier this month and a prediction of 1.5 million tonne of global deficit (excluding China), they are reconsidering the Siberia project but as Mukhmedshin states, It will not be a “project of the very short term, but in the medium term as the market will be in deficit, just to cover growing consumption."