MOSCOW, July 10 (Reuters) - Russia’s Rusal, the world’s largest aluminium producer, has launched the Dian-Dian bauxite project in Guinea, the company said in a statement on Thursday.
The decision to start the project comes amid continuing talks between Rusal, whose net debt stood at $10.3 billion at the end of March, and its creditors over debt restructuring.
Dian-Dian is the world’s largest bauxite deposit with reserves of 564 million tonnes, the company said. Bauxite is used to producer alumina, which is then used for aluminium production.
The first stage of the Dian-Dian project involves the construction and putting into operation by 2016 of a bauxite mine with an annual capacity of 3 million tonnes with the potential for a further increase of up to 6 million tonnes, Rusal said.
The total investment for the first stage of the project will be more than $220 million, with a significant part of this budget reserved for infrastructure development in Guinea, specifically railway and port development. To transport bauxite from the mine, a new 25 km road will be built, Rusal said.
With the capital spending of $73 million per year over three years, Rusal will be able to finance it internally and will be able to increase its bauxite self-sufficiency to 93 percent from 74 percent in 2013, Morgan Stanley said in a note. (Reporting by Polina Devitt; Editing by Mark Potter)