Rusal to spend US$5 billion on bauxite, boost reserves

United Co Rusal, the world's biggest aluminum producer, will spend US$5 billion in the next five years to upgrade its bauxite operations that already hold enough reserves for a half-century. The Moscow-based metals maker will spend the cash on refining equipment that will boost alumina output by 55% to 17.5 Mt a year, Pavel Ovchinnikov, director of the company's alumina division, told reporters Wednesday. Bauxite is refined into alumina, which is then used to make aluminum. "Growth for our products is being driven by Brazil, Russia, India and China," Ovchinnikov said at Rusal's Aughinish Alumina plant near Limerick, Ireland. Rusal, controlled by billionaire Oleg Deripaska, will spend US$10.9 billion on new aluminum plants and upgrades to existing ones by 2015, seeking to take advantage of four consecutive years of rising prices. The company has bauxite reserves totaling 2.528 billion tonnes, enough for 50 years of aluminum smelting, and "strong potential" to expand on that in Vietnam, Indonesia, Australia and Brazil, Ovchinnikov said. The metals maker this month signed a US$1.6 billion agreement with PT Aneka Tambang, or Antam, to build a bauxite and alumina plant in Indonesia. The complex will produce 3.6 Mt of bauxite and 1.2 Mt of alumina each year from 2011. Rusal in May opened an office in Vietnam, which holds the world's fourth-largest bauxite reserves.The company produces about 4 Mt of aluminum a year and accounts for 15% of global alumina production. The company has 3.7 Mt of surplus alumina from last year's production that it may sell on the market. The company produced 11.3 Mt of alumina last year.