Russia's second largest aluminium producer, SUAL, said it has signed a preliminary deal with US energy company AES Corp on power supplies for a smelter it is planning to build in Kazakhstan.
"The annual demand of the new smelter, which has a prospective capacity of 500,000 tonnes of primary aluminium per annum, is estimated to be approximately 7.48 billion kilowatt hours," SUAL said in a statement on Monday.
SUAL, controlled by Viktor Vekselberg, ranked Russia's fifth-richest man by Forbes magazine in May, and Len Blavatnik, a US business figure of Russian origin, aims to raise its output to 2.2 million tonnes of aluminium by 2012 from 1.05 million produced last year.
The memorandum of understanding, signed between SUAL and AES's Kazakh subsidiary Nurenergoservice LLP, cements the "principal understanding" between the parties on future power supplies to the new aluminium smelter from the Kazakh Ekibastuz GRES-1 power station for a period of 20-30 years, SUAL said.
AES is undertaking to supply SUAL with energy at economically viable prices, a key consideration before the construction of aluminium smelters, due to their high power consumption.