Alumina plant Cemtrade Oradea will resume operations this week, after two years of inactivity. The surging alumina prices have determined Russian group Ruski Aluminii to make this decision, which will create 700 jobs. The owners of the Moscow-based group have rented the plant to one of the company's best managers, Iacov Itcov, for a period of three years.
The managers of Cemtrade are in talks with the Oradea City Hall, owner of the former CET (heating station), negotiating the price of the gigacalorie. To be competitive on the international markets, the Russians want the price to go as low as 16 USD/gigacalorie, down from the 20 USD currently levied by the heating station. Still, as they are aware that the alumina plant will become the main customer of the CET (which heavily relies on the population at present), the local authorities are looking for solutions to push down the heating prices.
Dragos Gligor, manager of the Oradea-based CET, does not have many options to choose from. He can either raise the heating price paid by the population or persuade Ruski Aluminii (which also owns mines) to supply $4 cheaper coal to the station or he can rent the necessary equipment to the plant, so that it can produce its own heating. "None of these scenarios will bring me any profit," says Dragos Gligor. The talks continue.
Theoretically, the reopening of Cemtrade should help the industry in Bihor County, as the Dobresti and Voivozi mines (the traditional bauxite and coal suppliers to the Oradea-based plant) are set to resume operations.
The management of the Dobresti mine (which was shut down five years ago) is not very optimistic, since Cemtrade already has a contract with a bauxite supplier from Greece.
"I should get some loans to make the necessary investments, but the plant has only been rented for three years. As far as I know, the owner can very well close it down afterwards and leave me stranded," says Tanase Pele, president of the employees association that took over the mine and established Mineral West Dobresti. The Voivozi miners are not thrilled, either. The CET needs coal at a price of 5.4 USD/gigacalorie, whereas the Bihor coal costs more than 9 USD.
Thus, the Bihor alumina will be obtained using Russian coal from Greek bauxite.
Ruski Aluminii, the world's second-largest aluminium producer (which also comprises Cemtrade Oradea) has to buy alumina from the competition in order to meet its export contracts. "Huge demand comes from China, which has pushed the price of a tonne of alumina from 260 USD to 380 USD in only one year," Francisc Erdei, Cemtrade general manager told Ziarul Financiar - the Transilvania Edition.
Built in 1967, the alumina plant fared very well in the '80s, when its output had gone up to 225,000 tonnes of alumina annually. However, the industry has seen a decline since the '90s. In 1997, Alor (former name of Cemtrade) was paying 30USD per gigacalorie, whereas the competition was paying only 20 dollars. The plant entered liquidation in 1999 and was taken over by Ruski Aluminii in 2000.
transilvania@zf.ro
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