Russian smelter in grab for power Business The Australian

RUSSIAN aluminium giant RUSAL is on the hunt for power projects in Queensland as it considers building an aluminium smelter in the state.
Power is key for aluminium - dubbed "congealed energy" because of the huge amount of power needed to smelt it - and RUSAL is believed to be looking at harnessing power from coal-seam gas or the proposed gas pipeline from Papua New Guinea.
Premier Peter Beattie met RUSAL chief executive Alexander Bulygin in Moscow yesterday to formalise an agreement to establish a joint working group to look at developing power projects in the state.
While the membership of the working group has yet to be finalised, former WMC boss Andrew Michelmore would be a natural choice. Mr Michelmore, who heads RUSAL's energy investment vehicle, was recently appointed to the company's board.
"The development of energy and aluminium projects based on RUSAL's competitive advantages will provide a significant impetus for industrial development in regional Queensland," Mr Beattie said.
RUSAL said the working group on power opportunities would form the basis for ongoing co-operation with Queensland in "exploring opportunities for the expansion of RUSAL's interests in Australia, the potential development of an aluminium smelter and the associated base-load generating capacity using alternative fuels."
RUSAL, the world's third-largest aluminium producer, is aiming to double its alumina and aluminium production by 2013, and is looking to diversify production beyond Russia.
RUSAL's aluminium production is now concentrated in Siberia, benefiting from abundant cheap hydro-electric power there, but sited thousands of kilometres from ports.
RUSAL is building a new 600,000 tonnes-a-year aluminium smelter in Siberia as part of a broader government-backed $US3.6 billion ($4.8 billion) hydro-electric project.
"Within the framework of our strategy we've been actively seeking new opportunities to produce globally competitive electric energy required for the construction of aluminium production facilities," Mr Bulygin said.
"We think Queensland has great potential for the establishment of additional energy generating capacity as the basis for the development of aluminium industry and related projects," he said.
A RUSAL smelter in Queensland would have a ready source of alumina feedstock on hand since RUSAL already has a 20 per cent stake in the Queensland Alumina Refinery in Queensland.
Chinese aluminium giant Chalco is also looking at possibly building an aluminium smelter in the state after signing a memorandum of understanding to develop the Aurukun bauxite deposit on Cape York.
RUSAL is owned by Russian billionaire Oleg Deripaska, one of the so-called oligarchs that emerged from the country's privatisation program in the wake of the collapse of communism.