UPDATE 2-RUSAL to slash Guinea alumina output - source

CONAKRY, June 24 (Reuters) - Russian metals firm RUSAL will cut alumina production at its Friguia plant in Guinea by more than 50 percent from July 1, a RUSAL executive in the West African country said on Wednesday. RUSAL is cutting metals output across its operations as it attempts to restructure $7.3 billion in foreign loans, while metals prices are around half of their year-ago levels and demand is not expected to rise dramatically in the near future. 'The management has taken the decision...to reduce the factory's production which is currently around 52,000 tonnes of alumina per month to 20,000 tonnes,' the source said, speaking on condition of anonymity. RUSAL, which employs around 1,200 people at Friguia, intends to continue paying full salaries and does not plan to cut jobs, he said. The firm's Moscow headquarters could not be immediately contacted for comment. RUSAL is in a legal dispute with Guinea over the terms of its 2006 purchase of Friguia, the biggest industrial project in the world's number one bauxite exporter. Deeply impoverished despite being a bauxite and gold producer, and potentially a major source of iron ore, Guinea is heavily reliant on minerals for export revenue. RUSAL reduced overall aluminium production by 7 percent in the first quarter, and alumina production by 25 percent. It has said it wants to reduce alumina output by 3.9 million tonnes by the end of 2009. The firm has suspended alumina production at the Alpart and Windalco refineries in Jamaica and at Eurallumina in Italy, and cut volumes by 25 percent sat its Aughinish refinery in Ireland. Benchmark prices of aluminium as set on the London Metal Exchange have almost halved in the past year as demand for the goods in which is it used, among them cars, has fallen. The metal traded at $1,660 per tonne on Wednesday. Guinea's Mines Minister Mahmoud Thiam said he had not been officially informed of RUSAL's decision. 'What I can say is that we know that this company has been hit by the full force of the global financial crisis,' he said.