UC Rusal said rising costs or harm global aluminum industry grow

Moscow, Feb 28 -- A senior official from Russia said on Thursday, rising costs is likely to make new capacity delaying into operation in Russia and other countries in the near future. However, the rising demands leading by China will drive international aluminum price up. Artyom Volynes, the director of United Company Rusal said, the expense of building a new smelter has nearly doubled in the past five years. He said, "the expense is relatively low in Russia. We expect the sharply increasing of the capital expenditure and the rising of energy costs will force new project run aground, so does in Russia and other countries in the world." He said the Komi alumina project has been postponed. "Komi alumina project is an example, as one of the largest project being built in Russia, the construction will be postponed." UC Rusal produces 12% aluminum of global output. The company produces 4.2 million tones aluminium last year. It also plans to raise the output to 6 million tonnes in 2013 through setting up several new smelters. Volynest said, the rising energy costs in the world strengthens the necessary of insurance of electricity supply of new projects. "Our experience is that we can not set up new projects without energy supply."