UC Rusal has commissioned a mine with a capacity of 3 million tons of bauxite per year at the Dian-Dian field in the Republic of Guinea. The company reported this on June 19.
Diane Dian is the world's largest bauxite deposit with proven ore reserves of 564 million tons. The license for its development belongs to UC Rusal since 2001. The agreement with the government of Guinea assumes that the investment in the project will be $ 1.7 billion, by 2019. will be built alumina plant with a capacity of 1.2 million tons per year, 25 km of road, railway and port infrastructure. In 2014, the company said that the first phase of the project - the production of 3 million tonnes of bauxite - will be launched in 2016.
ACRA analyst Maxim Khudalov connects the delay in launching the project with excess of raw materials, which was then observed by the company. "Now the situation has changed. And the company risks to face its deficit, "he adds. On April 6, the US Treasury Department imposed sanctions against Oleg Deripaska and his eight companies, including UC Rusal. American residents are prohibited from doing business with sub-investment companies, as well as owning their securities. The prohibition does not apply to non-residents of the United States, but they can themselves be sanctioned for material transactions with such companies. Therefore, in April, many foreign companies began to refuse cooperation with UC Rusal one by one. So, Rio Tinto warned investors about the risk of declaring force majeure for the supply of alumina and stressed the uncertainty of further development of its Australian joint venture - Queensland Alumina with UC Rusal (the latter owns 20% of the enterprise).
In 2017, UC Rusal produced 3.893 million tonnes of aluminum. Of these, 96% (3.741 million tonnes) - at Russian enterprises. The raw material for the production of aluminum is alumina, which, in turn, is produced from bauxite. As Khudalov explains, an average of 2 tons of alumina per 1 ton of aluminum, for the production of which 2 tons of bauxite are also consumed. Thus, to preserve the current production at the Russian plants of the company, about 7.5 million tons of alumina and almost 15 million tons of bauxite are needed.
And since there are no large bauxite deposits in Russia, UC Rusal receives the lion's share of raw materials for metallurgical plants from abroad.
"Diane-Dian" is a long-term project, a long-planned investment, says an investment banker working with UC Rusal's counterparties. "If he was at the initial stage of implementation, it is not known whether his company would have completed or not in the current situation," he points out. "Of course, at the moment it looks like Diane-Dian guarantees raw materials security to UC Rusal, but the Guinean investments of the company started long before the sanctions and are more strategic: 100% of own raw materials for aluminum plants." The situation around UC Rusal is too unstable, he notes: "It's unclear how the US Treasury will assess the launch of the project. But the company could not give up this invested deposit. "
Good deposits are now very rare, says Andrey Tretelnikov, investment director of TKC Partners. The company must either buy raw materials, or produce it itself. And for UC Rusal, which turned out to be under sanctions, the purchase of raw materials on the international market will now be, if not impossible, then very expensive, he stresses.
If we consider this news from the point of view of geopolitics, then this is a serious message to the market, says partner of the consulting company Urus Advisory Alexei Panin: "The company seems to say that it is ready to work" in spite of ".
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