Rusal in High Demand

Following the example of China, Jamaica, Azerbaijan, Kazakhstan and Australia, Indonesia is courting Rusal as an investor. The Russian company is being offered participation in the construction of an aluminum plant with a capacity of 300,000 tons per year in Tayan, Western Kalimantan, Indonesia. According to the Jakarta Post, the Indonesian PT Aneka Tambang (Antam) has approached Rusal with the project, with will cost $220 million and be completed by 2010. There are also reports in the Indonesian press that a consortium will be formed to include the Japanese Marubeni and Singaporean Swadenco, which expressed interest in the Tayan project earlier this year. The Rusal press service told Kommersant that a bauxite plant is under consideration, and that the company is indeed interested in it. Rusal's Vera Kurochkina said that negotiations with the Indonesians were in their earliest stages. She said that the monetary figures mentioned in the Indonesian press are erroneous and that an aluminum plant of that size would cost no less than $750 million to build. Information has appeared in the press at various times about Rusal projects in a number of countries. Rusal has cautiously declined to comment on any of them. Analysts suggest that one reason for its reticence is its high debt load. As of July 1, 2007, it had a net debt of $7.7 billion. Because of that, any offer of participation in a consortium should be of interest to the company. The company's upcoming IPO will determine the outcome of its debt problem. If it issues additional shares, that problem will fade.