Russia-based Rusal, which already owns a 20 per cent stake in Gladstone’s Queensland Alumina (QAL), is actively investigating establishing a refinery and smelter in the state as part of its stated expansion plans.
It comes as Russian companies actively increase their presence in Australia, Russian steel giant Magnitogorsk Iron and Steel Works notifying the Federal Government this week of plans to take a $1.5 billion stake in Fortescue Metals Group.
The expansion strategy will continue, at least according to Russian Agriculture Minister Alexei Gordeyev. He told delegates in Brisbane at the Russia-Australian business conference that Russia was very keen to forge new horizons with Australia.
“We would say that today, Australia is becoming for us a closer and more familiar region,” Mr Gordeyev said.
His comments came as Rusal chairman John Hannagan said his company felt Queensland offered great potential for the expansion of the aluminium group’s business and the aluminium industry in general.
“The QAL refinery and smelter in Gladstone is one of the world’s largest and we believe has the potential for expansion,” Mr Hannagan said.
He said any expansion at Gladstone hinged on a proviso that Rusal could continue to source competitively priced bauxite from the world class deposit at Weipa on Cape York.
Mr Hannagan indicated Rusal’s interests in Queensland were not restricted to alumina.
“Queensland also has large reserves of thermal coal which might be used for power generation given a suitable economic structure and competitive pricing,” he said.
“Rusal has engaged the Queensland Government in a working group to explore the potential for building a smelter based on competitive electricity and competitive bauxite supply.”
Mr Hannagan said the working group had now completed its assessment and Rusal, along with power and coal generation companies, continued to explore the possibilities in detail.
The Rusal chairman said the green issue had also impacted heavily on Rusal’s future Australian expansion. Rusal announced this year it aimed to be carbon neutral by 2015 with 80 per cent of the company’s aluminium currently produced using hydro power.
Federal Industry Minister Ian Macfarlane said Russian investment in Australia totalled about $6 billion but it was set to rise.
He said there was a wide range of opportunities for Russian companies keen to expand in Australia.