ENRC Completes Kazakhstan Alumina Refinery Expansion

LONDON, July 18 (Dow Jones) -- U.K.-listed, Kazakhstan-focused Eurasian Natural Resources PLC (ENRC.LN) Monday said it has completed the expansion of its Kazakhstan alumina refinery on time and within its $305 million budget.

The refinery has also successfully reached its target alumina production of 1.7 million metric tons a year, the company said in a statement.

The larger alumina production capacity will be used to support the company's expanded aluminum production capacity in Kazakhstan, which now stands at 250,000 tons a year.

"We are now able to increase both our internal consumption and external sales of alumina, underpinning ENRC's ability to maintain competitive advantage as a low-cost producer," ENRC's Chief Executive Felix Vulis said in a statement.

ENRC is the world's ninth largest supplier of alumina traded volume, according to the company. It produced 1.64 million tons of alumina and 227,000 tons of aluminum in 2010. About 72% of the alumina output was shipped to its largest customer, Russia's United Company Rusal (0486.HK), which has a 1.2 million ton-a-year volume contract with ENRC that expires in 2016. The remainder of the alumina output was consumed internally.

ENRC's alumina and aluminum division accounted for 14% of the company's total revenue last year and Rusal accounted for about 42% of the alumina and aluminum division's sales revenues in 2010.

At 1052 GMT, ENRC's shares were down 1.5%, or 12 pence, at 750p, while the FTSE 350 mining index was down 1.6%.

The refinery expansion is part of ENRC's significant on-going investment program in Kazakhstan and Africa. The company is in the process of constructing a 136,000-tons-a-year anode plant that will be completed in 2012 at an estimated cost of $240 million. The anode plant produces large carbon blocks which is used in the aluminum smelting process.