SUAL, Rusal consider value-added products

MOSCOW – Russia's two largest aluminum producers, facing a decline in world primary metal prices, have started paying more attention to value-added products, Russian Aluminum (Rusal) and SUAL Holding said.

A group of shareholders in Rusal, the country's No. 1 aluminum company, has gained control of a large stake in the Mosmetallokonstruktsiya (Mosmek) plant in the Moscow region which produces construction materials, a Rusal statement said.

"Owners of Russian Aluminum consider cooperation with Mosmek, the production of which has high demand inside the country, as one of the anti-crisis measures aimed at minimizing losses," it said.

Rusal's traders will supply primary aluminum to Mosmek, with a design capacity of 1,000 tons of products per month, and will also be responsible for their sales.Rusal produced 2.44 million tons of primary aluminum in 2000.

SUAL Holding, the country's second-largest producer of the metal, said its Kamensk-Uralsk Metals Plant (KUMZ) and Mikhailovsk Non-Ferrous Metals Processing Plant (Mikhalyum), both in the Urals, had increased their aluminum products output.

Mikhalyum raised its output by 89.2 percent in January-October to 4,142 tons from the same period last year, while Mikhalyum produced 55,556 tons of aluminum products in the first 10 months of 2001, a 400-ton year-on-year increase.

The two plants produce, aluminum sheets and sections, rods, wire, and utensils. SUAL produced 594,000 tons of primary aluminum last year.

Belovo zinc plant output rises in first nine months

NOVOSIBIRSK – Russia's Belovo zinc plant produced 2,165 tons of metallic zinc and zinc powder in the first nine months of 2001, up from 2,069 tons in the same period of 2000, the plant's executive director said.

Igor Nozdrin declined to give the breakdown of the two products' output.

Nozdrin said that the plant continued to suffer losses due to weak world non-ferrous metals prices and he expected it to produce less metal this year than last year.

The plant produced 3,950 tons of both metallic zinc and zinc powder in 2000. Situated in Siberia's Kemerovo region, it was declared bankrupt more than a year ago, but it has failed to find a buyer so far.

Rezh awaits market

YEKATERINBURG – Rezh nickel plant, a minor producer of matte, an intermediate product for nickel output, will restart production only when the market revives, the plant's deputy CEO said.

Rezh suspended output from Oct. 1 due to weak world nickel prices and high domestic railway tariffs and sent most of its staff on vacation until Nov. 1. Eduard Shashkov said the holiday had been extended to Dec. 1.

"We have very gloomy prospects," Shashkov said. "We are unable to produce as world nickel prices are lower than our production costs."

"But we will be ready to restart work the day after the prices rise," he added.

Rezh, built in 1934 in the Urals Sverdlovsk region, produces matte with nickel content of 12-14 percent, which Ufaley plant in the neighboring Chelyabinsk region processes into nickel for Rezh. Ufaley halted output for the same reason in September.

Rezh, with an annual capacity of 6,000 tons, produced 2,945 tons of nickel in the first half of 2001, a 21 percent increase year-on-year.

MICEX to delist old Norilsk Nickel shares

MOSCOW – The Moscow International Currency Exchange (MICEX) will from Dec. 3 delist old shares of Russia's metals giant Norilsk Nickel, Norilsk said.

Norilsk has completed a restructure which involved a swap of shares in the parent company for those in its core unit, Mining and Metals Co. (MMC) Norilsk Nickel, which have since become its main traded equity.

Only some three percent of old Norilsk stock is unswapped. The company has said that owners of old stock will have one more chance to swap it within the next 12 months.

MMC eyes $2 billion

MOSCOW – Mining and Metals Co. (MMC) Norilsk Nickel hopes to earn about $2 billion this year from selling platinum group metals, First Deputy Chairman Yury Kotlyar said.

"This will allow us to pay taxes and compensate the situation on the nickel market," Kotlyar told reporters. He declined to give a comparative figure for 2000, but added that more than half of MMC's profits were from sales of platinum metals, which are mostly used in auto catalysts.

MMC's first half net profit slipped 0.6 percent to 22.75 billion rubles ($767 million) compared with the same period last year.

Kotlyar also said MMC planned to increase its market capitalization to $10 billion from $2 billion within a short period of time.

The company is completing a complicated share restructure, in which shares in Norilsk are swapped for MMC shares.

"The restructuring will be over by the end of the year. We are counting on getting a listing at the London [Stock] Exchange and probably on other exchanges," Kotlyar said.

He said the company planned to distribute profits equally among its shareholders, including 20 percent foreign ones.

Urals Mining capacity set

YEKATERINBURG – Russia's second-largest copper producer, the Urals Mining and Metals Co., plans to commission a zinc refinery with an annual capacity of 150,000 tons at the end of 2004, a company official said.

"The electrolytic zinc division will be built, tentatively, in three years," UMMC technical director Konstantin Plekhanov said, adding the company saw zinc as a priority.

UMMC planned to start producing zinc and lead cathodes last September, but had to suspend the projects due to weak world copper prices. Plekhanov declined to commernt on the fate of the firm's plans for lead.

He said half of the 150,000 tons of zinc the company planned to produce each year would be refined from its own copper output waste. It will produce the rest from acquired raw materials, including scrap.

The firm will prepare before the end of the year a feasibility study for the refinery, which will be built in a copper foil workshop at UMMC's Uralelectromed plant.

Kazak copper hike

ASTANA – Kazakstan copper monopoly Kazakhmys will raise refined copper output to 415,000 tons this year from 394,000 in 2000, despite a fall in world prices for the metal, a company official said.

"We have no plans to reduce production, and we are likely to achieve the level of 415,000 tons this year," Kazakhmys spokesman Vladislav Nikolayev told Reuters.