RUSAL Pockets Guyana’s Mines

AMC said that it sold its mines for $22 million to Bauxite Company of Guyana Inc., RUSAL’s subsidiary with 10-percent stake belonging to Guyana’s government. Bauxite Company is set to boost the extraction of bauxites by 80 percent to 2.5 million metric tons a year, the company’s general manager Alexey Gordimov told Stabroek News agency. The country’s prime minister Samuel Hinds hopes that RUSAL will make the industry lucrative. The Russian aluminum giant is expected to put some $20 million into the project.

A part of the bauxites will be shipped from Guyana to the Nikolaevsky Aluminous Plant, while the remaining part will go to consumers in the Caribbean, Mediterranean and Black Sea regions. 350,000 metric tons of bauxites are expected to be delivered at the Ukrainian smelter in 2006. The supply will go up to 1 million tons in 2008.

RUSAL also signed a ten-year contract with Oldendorf Carriers, a German shipping company, to transport the cargo. The Russians will pay some $8 or $10 for every metric ton of bauxites to be taken from the northern part of the South America to ports in the Black Sea, according to Alexey Bezborodov, the director of projects of SeaNews.

The agreement with the government of Guyana is the first successful project of RUSAL in South America. The Russian company has been in the talks with Venezuela’s authorities on the bauxites mining since 2003 but the parties have not come to terms yet. The deal with Guyana may decrease RUSAL’s interest in bauxite mines in Venezuela.