China Power, RUSAL to map out aluminium plans

HONG KONG, April 9 (Reuters) - China Power Investment Corp will send a delegate to Russia this month in an effort to map out plans to build an alumina complex in Guinea and an aluminium smelter in China together with United Company RUSAL.

The partnership will give the Russian firm a foothold in China, the world's biggest aluminium market, and help the Chinese firm secure alumina supply for its aluminium capacity.

"We are going to Russia this month to see the possibility of going ahead with the investment," a senior executive at a metals subsidiary of the state-owned power operator told Reuters on Wednesday.

The details would include the actual investment of the two companies in the two projects. The aluminium smelter in China would cost two firms about 5 billion yuan ($714.3 million), he said.

The executive said the Chinese firm's main consideration of the investment was UC RUSAL's bauxite resources in Guinea, which would be used for the alumina project.

Alumina, the main material for aluminium production, is refined from bauxite.

UC RUSAL, the world's largest aluminium producer, said in February it and China Power had signed a memorandum of understanding under which they may jointly build a 500,000 tonne-a-year aluminium smelter in China's northwestern Qinghai province and a 2.8 million tonne-a-year alumina complex in Guinea.

The Chinese firm would take a 51 percent stake in the aluminium smelter and a 49 percent in the alumina complex.

In Guinea, a country rich in bauxite, UC RUSAL owns mining firm Compagnie des Bauxites de Kindia as well as the Friguia alumina refinery. It also owns the Dian Dian bauxite deposit.

"The size of the alumina complex would depend on RUSAL's resources in Guinea. We have not been told how much bauxite reserves they hold for the project," the Chinese executive said.

China Power controls aluminium producer HMHJ Aluminum and Electricity Company Ltd in Inner Mongolia and is building a 500,000 tonne-a-year aluminium smelter in Qinghai.

The firm has not decided whether it would sell a 49 percent stake in that Qinghai smelter to UC RUSAL or the two firms would build another smelter with the same capacity, the executive said.

About 2 million tonnes of alumina are required for two 500,000-tonne aluminium smelters a year.

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