Privately owned SUAL Group, one of the world’s 10 largest aluminum producers, will expand bauxite production in northern Russia with the aid of US$150 million in loans from International Finance Corp. (IFC), the private-sector arm of the World Bank, and the European Bank for Reconstruction and Development (EBRD).
The IFC and the EBRD will each provide a 9-year loan of US$45 million, making them the longest-term loans ever obtained by a Russian metal producer. The remaining US$30-million portion of each organization’s US$75-million loan is syndicated to international banks under an agreement that lists IFC and EBRD as the principal borrowers. The term of the syndicated portion is seven years.
Plans call for US$100 million to be used to increase annual bauxite output at SUAL’s Middle-Timan mine, 250 km south of the Arctic Circle, to 6 million tonnes from 1 million tonnes over the next four years.
The remaining US$50 million is earmarked for feasibility studies and preparatory work for an alumina refinery at Sosnogorsk, 245 km southeast of the Middle-Timan mine, and other feasibility studies for an aluminum smelter at Pechora, 250 km northeast of Sosnogorsk. The smelter and refinery would be part of the proposed Komi aluminum project in Russia’s Far North.
Washington, D.C.-based IFC promotes sustainable private-sector investment in developing countries. The EBRD, owned by 60 governments and two intergovernmental institutions, aims to foster free-market economies in central and eastern Europe and the Commonwealth of Independent States.
SUAL Group refined more than 2 million tonnes of alumina in 2003 and produced in excess of 890,000 tonnes of primary aluminum.
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