Chairman of the Management Board of Eurasian Group LLP Serik SHAKHAZHANOV:
ERG TO CUT ALUMINUM EXPORTS DUE TO THE CONSTRUCTION OF A NEW ELECTROLYSIS PLANT
Eurasian Resources Group (ERG) plans to build Kazakhstan Electrolysis Plant’s 3rd phase (KEZ-2) for aluminum production with a capacity of 250,000 tonnes a year in the next four years in Kazakhstan. In connection with plans to build KEZ-2 alumina exports will decline whereas the group does not intend to increase the alumina output in the next ten years. Serik SHAKHAZHANOV, chairman of the Management Board of Eurasian Group LLP, which manages ERG’s industrial assets in Kazakhstan, talked about that in the interview with Interfax-Kazakhstan.
- Will the group adjust production targets on alumina needed for aluminum production for 2018 and beyond?
- We have the current target - 1.5 million tonnes of alumina [per year]. In principle, we are moving on within the framework of this target. We process all by ourselves nearly a third of 1.5 million tonnes at Kazakhstan Electrolysis Plant (KEZ) and we export about 1 million tonnes to Russia. Later Mr. Mashkevich already voiced this, we are considering the issue of building the new electrolysis plant (KEZ-2). This electrolysis plant is not intended to increase [alumina] production at the same time exports will be cut.
- In what time frame will alumina production remain at the current rate - 1.5 million tonnes a year?
- Currently we are considering our strategy at least for the next 10 years. Within the 10-year framework we see the current production volume [remaining] at 1.5 million tonnes, and very likely [we] will keep with that.
- Earlier in reply to an enquiry from Interfax ERG explained to the agency that the group is open to discussing new partnerships on alumina. Are you considering new alumina buyers in connection with possible sanctions against your main buyer – Russia’s RusAl?
- We are always considering various sales markets. This is not possible cooperation but diversification of our exports and the expansion of the [number] of potential customers, prices and volumes to various markets. We are considering this because our current contract with RusAl lasts until the end of 2020 therefore within its framework we always think about the future.
There are no concrete agreements [on alumina supplies to the other companies at the moment]. Within the diversification framework we are also considering the construction of the electrolysis plant’s 3rd phase for aluminum production (KEZ-2). Specifically, now we don’t fix volumes because the negotiation process and the analysis of potential buyers are, of course, under way.
- What are these sales markets like, is there any groundwork now?
- We are currently examining various sales markets, starting from Russia in part, ending with Europe, China, that is where now our logistics will help deliver given the railway tariffs, fleet availability and shipping capabilities.
- Could you give more details about the construction of the electrolysis plant, when will the processing of raw materials be launched and what volumes?
- We started now the process of working out a feasibility study. As part of the feasibility study we plan to build this plant in the next four years. We consider various production volumes [starting] from 250,000 tonnes of primary aluminum at the minimum.
- Earlier the media reported with reference to sources that ERG is considering the acquisition of the national exploration company Kazgeology, which is put up for privatization. Could you comment on this information?
- Currently we don’t have such a project. But in any case ERG always considers various alternative options to improve the efficiency of its activities.
- Do you plan to increase the renewable energy sources portfolio in Kazakhstan. Now ERG is implementing projects to build renewable energy facilities in the country with an estimated installed capacity of up to 180 MW.
- This is the minimum (180 MW), within which we are currently considering projects. This will be our very first [renewable energy] project in Kazakhstan. As they say, the appetite comes with eating. So let's implement the first project, and we will think further.
- Thank you for the interview!
June, 2018
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