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Rusal intends to build an aluminum plant in Iran

September 22, 2011, 11:49 UTC+3
The US sanctions against Iran complicate the project implementation
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Oleg Deripaska’s United Company Rusal is pondering over an opportunity to build an aluminum plant in Iran with the output capacity of 375,000 tonnes that is about nine percent from the current capacity of the Rusal plants, the Kommersant writes. The negotiations continue with Iranian Mines and Mining Industries Development and Renovation Organization. The US sanctions against Iran complicate the project implementation. Oleg Deripaska has tense relations with the U.S. all the same. If the Rusal project evokes questions from the country’s authorities, the company can lose about a tenth part of its sales.

Rusal is negotiating with Iran to build an aluminum plant in this country, the minutes of the 9th meeting of the long-standing Russian-Iranian commission for trade and economic cooperation said on September 11. “The sides agreed to support the negotiations between Rusal and Iranian Mines and Mining Industries Development and Renovation Organisation in order to cooperate in the alum earth production from nepheline syenites and to build a new aluminum plant with the annual output up to 375,000 tonnes,” the document said. At the same meeting under the instructions from Igor Sechin Rostechnologii agreed with Iranian authorities to develop jointly a project to develop a lead-zinc deposit Mehdiabad at the cost of 1-1.2 billion dollars.

On Wednesday, Rusal told the Kommersant that the company “is interested in the development of business and the geographical diversification of aluminum production.” The launching of the plants in Iran is “one of such opportunities,” though “there are no concrete plans and the company is not negotiating projects in this country,” a Rusal source acknowledged. However, the Kommersant source, which is acquainted with the situation, noted that the project had been discussed already for several years, and Rusal officials have visited to Iran for negotiations all these years. The negotiations passed at the meetings of the long-standing Russian-Iranian commission.

The Kommersant source added that Rusal is not interested in making the Iranian project public “over political risks coming from this country.” The problem is international sanctions, which are in effect against Iran.

Rusal does not have production assets in the United States. But the country is an important market of the company, Nikolai Sosnovsky from VTB Capital noted. In 2010 the Rusal sales in the United States amounted to nine percent from total Rusal revenues (about 11 billion dollars in 2010). On the whole, the US accounts for 13% of world aluminum consumption. Meanwhile, Rusal CEO Oleg Deripaska has quite tense relations with the country’s authorities all the same. Since the late nineties Deripaska was repeatedly seeking to get an entry visa in the US, but failed to get it, as the FBI denied an entry visa to the latter.


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