INTERVIEW-Russia's Rusal eyes Indonesia as future alumina hub, plans smelter

Четверг, 27 февраля 2014 9:27 MSK

By Randy Fabi and Fergus Jensen

JAKARTA Feb 27 (Reuters) - Russia's aluminium giant United Company Rusal wants to make Indonesia a regional hub for its alumina production and will decide on an initial investment by the end of this year, said a senior official with its parent company.

Maxim Sokov, first deputy CEO of En+, told Reuters it was an "ideal time" to invest in Indonesia with global aluminium prices expected to bottom out this year, thanks in part to the country's ban on bauxite exports.

"We are in the moment in the cycle when there are a number of events that are coming together to help prices start to go upwards again," Sokov said this week during a visit to Jakarta as part of a high level Russian delegation led by its deputy prime minister.

"Indonesia ticks all the boxes and is the best platform for the next cycle of growth."

Indonesia banned all unprocessed mineral ore exports last month in an effort to force miners to build smelters and process their raw materials domestically. Before the ban, the Southeast Asian nation provided around 60 percent of China's bauxite imports.

The withdrawal of Indonesian bauxite from the global market has found widespread support among global mining giants like loss-making Rusal, which has been hit hard by weak aluminium prices.

Sokov said Rusal has lost its position as the world's top aluminium producer to Aluminum Corp of China Ltd (Chalco) after the Russian company shut down at least three smelters in the western part of the country.