We have advantage in China: RusAl

Russian aluminum producer United Co. RusAl is best positioned to reap most of the benefit, to rival Rio Tinto Alcan's detriment, from the continued expansion in China that will not abate soon and is not vulnerable to the West's general economic slowdown, Artem Volynets believes. The deputy chief executive officer and director of strategy and business development for the world's biggest aluminum maker - its 4.2 million tonnes output is slightly higher than Rio Tinto Alcan's 4.18 million tonnes - said in an interview during a break at a metals industry conference here that nothing will derail the Chinese expansion. And being next door - cutting down on soaring transportation costs - offers an advantage to Rusal that Rio Tinto Alcan cannot match, Volynets said. RusAl has low-cost smelters and is in the midst of an aggressive expansion phase, launching four new ones, three of them in Siberia. These will be the natural front-line supplier for Chinese aluminum demand, whose overall as well as per-capita consumption is expected to surge as its economy expands and modernizes rural areas. Rio Tinto Alcan spokesperson Stefano Bertolli countered that "we do see continued strong demand from China, but we feel our (smelters) are well-positioned on the cost curve (to serve that market) and that we have the best technology in the industry." As for the bare-knuckles fight over control of the board of Russia's largest mining company, OAO GMK Norilsk Nickel, in which RusAl acquired a 25-per-cent stake this year, Canadian director Heinz Schimmelbusch has become a focus of that fight. RusAl is controlled by Oleg Deripaska, Russia's richest oligarch, while his arch-rival billionaire Vladimir Potanin, a co-owner of Norilsk, recently won a bruising boardroom battle, installing Schimmelbusch and a former Russian tourism minister as independent directors, probably blocking what most insiders say is Deripaska's ambition to get total control of Norislk. Volynets condemned their "so-called status as independents," saying they were, in fact, Potanin puppets. "It's really improper and unfortunate to act that way," said Volynets, adding that his boss, Deripaska, will soon file a demand to void that slate of directors and install "real, proper directors who understand good governance." ---The Gazette