Russia's Rushydro may join hands with Rusal in its Siberian aluminium smelter project

Russia's public sector power company Rushydro may join Rusal’s new aluminium smelter project in Siberia, as shared by the board chairman of the company to Reuters. Rusal, the world's No.2 aluminium producer is resuming work on the Taishet project now which was on halt due to low aluminium prices.

"We will discuss this at the board meeting. In general, I think that taking such a decision (to join the Taishet project) is possible," said Yuri Trutnev, also Russian deputy prime minister in charge of developing the Far East.

If this project comes into operation, Rushydro will be able to sell its excess power and Rusal would return to its pre-economic crisis aluminium output levels of over 4 million tonnes per year. Rusal’s current aluminium output stands at 3.7 million tonnes. Rushydro's board is expected to decide on the development today on Aug 30. The company expects to get into a 50/50 partnership with Rusal.

"If we ask the question: Would it be good to have a top-notch aluminium smelter in Taishet or not? Of course it would be good," said Trutnev.

The Siberian project is well located in close proximity to power sources and logistics for potential business.

Since aluminium prices have jumped 22% to $2,071.50 a tonne since the start of 2017 on the back of China’s plan to cut capacity to fight pollution, it has created optimism among global aluminium producers. Rusal sees the deficit in global aluminium market reaching 1.8 million tonnes in 2018, up from around 1 million tonnes this year. Rusal plans to build the first line of the Taishet smelter by 2020 with a capacity of 430,000tpy.

Rusal expects to get further $700 million of financing from Russian state banks to complete the project and with Rushydro getting in the funding is expected to get sorted out faster.