Russians ponder aluminium plant< a>

GIANT Russian aluminium company Rusal is considering building a greenfields aluminium smelter in Queensland - and aims to power it through its own generating capacity.Chief executive Alexander Bulygin said preliminary studies had found that Queensland's combination of coal and alumina supplies could allow a greenfields smelter investment that relied on low energy costs.
Speaking from Moscow last night, Mr Bulygin declined to specify the investment or the time frame.
But it is understood Rusal has already had extensive discussions with Queensland's electricity-generating companies and with the PNG Gas Project owners.
Rusal said that its plans were independent of another Russian-backed group, Aldoga, which had halted plans to build an aluminium smelter at Gladstone.
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Mr Bulgyin spoke after the privately owned Rusal, the world's third-largest aluminium group, reported record earnings for 2005.
He said Rusal's 2005 sales increased by 12.8 per cent to $US6.1 billion ($8 billion) compared with $US5.4 billion in 2004.
Rusal, which was formed in 2000 from aluminium companies in Russia and the former Soviet Union, accounts for 75 per cent of Russian aluminium output and 10 per cent of world production.
Its investment in the world's largest alumina refinery, Queensland Alumina at Gladstone, is the biggest Russian investment in Australia.
Releasing Rusal's production and financial results for 2005, Mr Bulygin said measures taken by the Chinese Government to curb primary aluminium production growth, as well as significant power and raw material limitations, would impede China's development as a net exporter.
"Therefore, Rusal believes that all these factors will contribute to further aluminium price increases," he said.
"Over the year the company expects aluminium demand to rise at a rate of 7 per cent and aluminium prices to be sustained at $US2200 to $US2500 a tonne, with the possibility of reaching the level of $US2700 to $US2900 a tonne."
The company's total investment tripled from $US524 million in 2004 to $US1.4 billion in 2005.
Aluminium production was up 1.6 per cent on the year to 2.7 million tonnes of primary aluminium. Alumina production increased 25.7 per cent to 3.89 million tonnes.
Mr Bulygin said four main factors were influencing the world aluminium market.
These were energy prices, the high cost of new production capacity, further closures of unprofitable smelters in Europe and the US, and aluminium production in China.
But he said the price of alumina was likely to fall this year from around $US500-550 a tonne and could be as low as $US350 a tonne in 2007.
Rusal is owned by one of Russia's so-called oligarchs, Oleg Deripaska, through his company Basic Element, Russia's largest asset management company for private equity funds.