"We are holding consultations with HydroOGK and we will pick one of four possible construction sites for a hydrolysis plant with capacity of 1 million metric tons in July," said SUAL Vice President Vasily Kiselyov.
He said SUAL, one of the world's top-10 aluminum companies, would consult with HydroOGK and electricity monopoly Unified Energy System, which owns 100% of the hydro company, on a weighted average electricity price for the plant for the next 10-15 years.
Kiselyov said that fixing a long-term electricity tariff would be important for the plant in terms of price formation for its products, given that a one-cent rise in the tariff increased the cost of a ton of aluminum by $150.
Established in December 2004, HydroOGK holds 15 stakes in Russian hydroelectric power plants, or half of the country's total hydroelectric resources.
Kiselyov said global aluminum markets were favorable as demand was increasing by 5.5% annually.
"There is a shortage of aluminum on the market, which is why prices will remain high," he said, adding that the rapidly developing Far East needed new energy facilities.
SUAL has enterprises in nine Russian regions and in Ukraine, and annually mines over 5.4 million metric tons of bauxite, some 2.3 million metric tons of alumina, over 1 million tons of primary aluminum, and about 60,000 metric tons of silicon. It also manufactures aluminum products, including foil, wire, and wheel rims, and exports 80% of production.
