This company will also build a separate railway linking Binh Phuoc to Dak Nong province. China and the U.S. each has invested $1 billion in aluminum production in Vietnam.

UC Rusal To Invest $2B In Vietnam Aluminum Production

HANOI (Dow Jones)--Russia's United Company Rusal, or UC Rusal, the world's largest aluminum and alumina producer, plans to invest up to $2 billion in aluminum production in Vietnam in the coming years, a company official said Monday.

"UC Rusal has received the green light from the government for its plans to produce 750,000 tons of aluminum a year in Vietnam, and we are working with the authorities to prepare for the implementation of the investment plans," said the official from the company's representative office in Hanoi.

"UC Rusal will form a joint venture with state-owned Vinacomin to build a hydroelectric power plant and aluminum facility in Binh Phuoc province," said the official, who declined to be named. Binh Phuoc province is 100 kilometers north from Ho Chi Minh City.

This is the first time UC Rusal is investing in the production of aluminum in Vietnam.

"We need to build a hydropower plant to supply electricity to our plant as Vietnam doesn't have enough power for this kind of aluminum production," the official told Dow Jones Newswires.

The Russian company will also build a 300-kilometer railway to link the aluminum facility to Dak Nong province in the central region, which contains large reserves of bauxite needed for making aluminum, the official noted. The railway is expected to be built at the same time as the aluminum facility and power plant.

According to Vu Thanh Nam, director of the planning and investment department of Binh Phuoc's provincial government, the Russian aluminum giant's investment plans will take months to be realized, because of the huge financial capital involved.

"The investors will have to do lots of paperwork here before they can start building things," Nam added.

Dak Nong province in Vietnam's central region is estimated to have up to 8 billion tons of bauxite ore reserves, but the country so far has no production facility to make aluminum.

Vinacomin, formed as a result of the merger of the Vietnam National Coal Group and the Vietnam National Minerals Corporation, is responsible for all aluminum bauxite development in Vietnam.

A UC Rusal spokesperson in Moscow later Monday said the company "is considering the possibility of a bauxite production facility in Vietnam," but that no firm decision had been taken as yet.

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