China Technology Cheapest For India Aluminum Smelters-Engineer

Manama, BAHRAIN, Sep 22, 2010 (Dow Jones Commodities News via Comtex) --The capital expenditure needed for a new aluminum smelter in India run on Chinese technology is far cheaper than one based on western technology, the managing director of a Swiss engineering firm said Wednesday.

Hans Bohner of K+T Engineers told the Metal Bulletin aluminum conference in Bahrain that the capital cost for a western smelter with a nominal capacity of 350,000 metric tons a year is between $3,400/ton and $3,600/ton, while a Chinese smelter of around 250,000 tons a year is around $756-$775/ton cheaper, at $2,625-$2,844/ton.

Capital costs are the average amount of capital expenditure invested multiplied by interest rates.

Taking into account smelter life and interest rates, the cost of Chinese technology is between $30 and $39/ton lower, Bohner said, while the overall cost--including operational expenditure, capital expenditure and capital costs--is some $17/ton lower.

One of the reasons for the lower capital expenditure for Chinese operations is that labor in China is cheaper, Bohner said.