UC RUSAL to boost aluminium output

CHONGQING, China, Sept 22 (Reuters) - Russia's UC RUSAL, the world's top aluminium producer, will increase production of the metal by nearly 2 million tonnes by 2013 and aims to sell most of the expanded output to China, a senior executive said on Monday. Sergey Belsky, acting director for marketing and sales, said Asia would account for 50 percent of UC RUSAL's aluminium sales by 2015. Of that 70 percent - more than one-third of the firm's total output - would go to China. He said the latest crisis in financial markets would not change the long-term consumption growth for aluminium globally. "The future supply of RUSAL (to China) is logical because we are just next door," Belsky told Reuters at an exclusive interview on the sidelines of an aluminium conference in Chongqing in central China. UC RUSAL, the world's most efficient aluminium producer, will produce 6.2 million tonnes of primary aluminium by 2013, up from 4.4 million tonnes expected this year, Belsky said. By then, about 83 percent of the metal would be produced by the firm's operations in Siberia. EXCELLENT FUTURE UC RUSAL expects China, the world's top aluminium producing and consuming nation, to turn into a net importer as early as the fourth quarter of 2009 as Beijing's polices of energy saving, stricter environmental protection and taxes will restrict production growth in the country. In the meantime, the country's consumption of aluminium could rise by an average of 11 percent a year until 2015, a similar rate to the other BRIC economies - Brazil, Russia and India, despite the latest crisis in financial markets. "Prices sometimes go up and sometimes go down. This is the market. For a longer time, aluminium has an excellent future," Belsky said. UC RUSAL projects China's aluminium production capacity could reach 22.6 million tonnes by 2013, while consumption could reach 27.7 million tonnes by 2015. With the rosy picture in China, the firm also plans to invest $500 million to $3 billion into the nation in next 7 years. The investment plans would include expansion of production at its existing cathode block operations, a joint venture with China Power Investment Corp and other aluminium and alumina projects, Belsky said. UC RUSAL and China Power signed a memorandum of understanding in February to jointly build an alumina refinery in Guinea and an aluminium smelter in the northwestern Chinese province of Qinghai. The two firms have yet to sign a formal agreement for the joint investment. Belsky said the alumina refinery could have a designed capacity of 2.8 million tonnes a year and the smelter could be a half million tonnes, which would be powered by low-cost hydro-electricity. UC RUSAL was created last year through the merger of Russian aluminium major RUSAL, smaller domestic rival SUAL and assets belonging to commodities trader Glencore The merged firm produces 12 percent of the world's aluminium and 15 percent of alumina, making it the world's second-largest supplier of the material used for aluminium production. It operates 15 aluminium smelters in five countries and produces 11.3 million tonnes of alumina per year in 7 countries, with 100,000 employees worldwide. UC RUSAL's owner, Oleg Deripaska, is considering moving a planned initial public offering of the firm from London to Hong Kong, media reports have said. Belsky said he could not comment on any IPO plans. Deripaska is testing the waters with a plan to list 25 percent of his molybdenum miner SMR in Hong Kong later this year, raising around $200 million, sources familiar with the matter have told Reuters.