Rusal plans to build a terminal in the Far East

Rusal, which last week bought a stake in a Chinese alumina refinery, has stepped up plans to build a port terminal in the Far East through which it can receive alumina and ship aluminum. The terminal’s capacity can be 1.5 million tons per year. According to experts, construction will cost at least 12 billion rubles. and will take up to three years.

In October, Rusal increased the authorized capital of its subsidiary Prichal LLC, created in 2017, from 185 million to 620 million rubles, as follows from the disclosure data.

Prichal was initially created as a project company for the construction of a terminal in the waters of Vanino Bay with a capacity of 1.5 million tons per year for shipping products from a future alumina refinery with a similar capacity of the first line. In 2017, Rusal planned that construction would cost 5.4 billion rubles. and will be completed by the end of 2019. However, these plans were then shelved, and there have been no reports of terminal construction since 2017.

Rusal confirmed to Kommersant that “Rusal is currently considering the possibility of using the terminal also for shipping finished products.” The company added that it never abandoned the idea of ​​building this facility.

In 2022, Rusal announced a tender for the development of pre-design solutions for organizing a transshipment complex for imported raw materials in the northwestern and far eastern directions. According to the tender materials, the winner was required to analyze the creation of a specialized marine terminal for transshipment of raw materials in the port of Sovetskaya Gavan on the basis of the existing port, as well as to assess the water area to select an export-import terminal in the vicinity of the sea ports of the Leningrad region.

Historically, Rusal used the port of Vanino to receive raw materials from Australia, and the seaport of St. Petersburg to receive alumina from Brazil and Jamaica. In 2018, after the introduction of blocking US sanctions, the company also considered the possibility of transshipping alumina through Novorossiysk.

The situation with the supply of raw materials for Rusal sharply worsened in 2022, when the company lost access to the Nikolaev Alumina Refinery in Ukraine and raw materials from Australia due to sanctions. According to the company’s report, the cost of sales of aluminum increased in 2022 by 30.2%, to $10.77 billion, including costs for the purchase of alumina soared by 149.3%, to $1.847 billion, due to rising prices and an increase in the volume of purchased raw materials. Rusal replaced alumina supplies from Ukraine and Australia mainly with raw materials from China. At the same time, due to sanctions, the share of the Asian market in Rusal’s aluminum sales increased sharply – from 23% to 33% in the first half of 2023, while the share of revenue coming from the European market fell to 31% from 40% a year ago.

Rusal announced on October 24 that it was acquiring a 30% stake in Chinese alumina producer Hebei Wenfeng New Materials Co. for $261 million, which would allow the Russian company to receive about 1.45 million tons of alumina per year as a share in the production. This plant is located in Tangshan, and supplies from there to Sovgavan can be arranged by sea. Rusal also announced plans in the summer to build an alumina plant in Ust-Luga with a capacity of 4.8 million tons and a cost of 400 billion rubles.

The cost of building a new terminal could be at least 12 billion rubles, says the head of Infoline-Analytics, Mikhail Burmistrov. A realistic construction period looks like two and a half to three years, the expert believes, but it will be difficult to do it faster. Transport accessibility of Vanino and Sovgavan will not be a problem for builders: many materials can be delivered by water, he adds. Mikhail Burmistrov considers personnel and the lack of qualified contractors for construction projects in the Far East to be a more significant problem.

Evgeniy Zainullin