Metallurgic giant Ruschii Aluminium (RusAl), the world's second-largest aluminium producer, is trying to sell the aluminium plant it owns in Romania - Alor Oradea, according to market sources.
RusAl representatives have already had talks with trade company Balli, which controls BBG Alum Tulcea (another aluminium plant) and Marco International - the majority shareholder in Alro and Alprom Slatina, the above-mentioned sources say.
Discussions have not progressed, though, as the potential buyers are put off by the amount of investments needed to increase the quality of Alor's output, and by the big distance between Oradea and the nearest harbour (which has a negative impact upon delivery costs).
Alor is currently under conservation, the plant's production having been halted last year, because it was incurring losses following the raise in electrical power prices. Electricity accounts for a big chunk of alumina's final production costs.
The Russians have been trying to sell Alor to Balli and Marco because both groups would theoretically be interested in buying the plant.
Tulcea-based Balli plant produces alumina, but of a different type, and the British group might benefit from the good market conditions to increase its production capacity.
On the other hand, Balli's international situation is not quite solid and BBG Alum is still burdened by substantial historical debts.
Marco International already controls an aluminium producer in Romania (Alro) and a company that processes aluminium (Alprom), so that an aluminium producer would bring complete integration to the holding.
Alumina is the raw material used to produce aluminium. Alro uses a different type of alumina from the one made by Alor, and investments needed for quality adjustment come to 10 million dollars. Moreover, the costs entailed by possible acquisitions of alumina from Alor are, including transportation, higher than the cost of imported alumina.
Balli and Marco International officials could not be contacted for comment on the alleged discussions with RusAl.
RusAl is trying to sell Alor despite the improved alumina market conditions (prices have increased over 15% since last year) and the deficit of alumina in Russia, which is estimated at over 1.5 million tonnes.
Alor can produce about 250,000 tonnes of alumina and BBG Alum - 350,000 tonnes.
Alum is currently selling its entire production to trading company Glencore under a five-year contract, so, at least for the medium-term, Alor is the only potential source of alumina in Romania.
RusAl accounts for 10% of the world production of aluminium, holding a bauxite mine, three aluminium refineries, four aluminium plants and six aluminium processing plants. The group was set up in 2000 and is controlled by the Russian businessman Oleg Deripaska.
Companies operating in the Romanian aluminium industry (Alro, Alprom and Alum) annually derive cumulated turnover worth more than 400 million dollars.
laurentiu.ispir@zf.ro
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