BaselCement Buys Refinery From RusAl

Billionaire Oleg Deripaska's cement company has agreed to buy the Pikalyovo alumina refinery from United Company RusAl and spend $83 million converting it into a cement factory.

BaselCement and RusAl, which are both part of Deripaska's holding company Basic Element, said in a statement Friday that the plant would be converted into one of the world's largest cement producers to meet construction demand in St. Petersburg. It formerly supplied a small smelter in the Leningrad region, but alumina production became unprofitable in 2006.

"A technical audit conducted in 2007 concluded that opportunities for converting it into other core products should be explored. ... [RusAl] has decided to sell the asset to BaselCement, which will convert the facility into a cement production center," the statement said.

After its conversion, the plant is expected to produce about 1.8 million tons of cement per year. Production should begin in the fall and the plant will complete its full switch to cement production by mid-2009.