MOSCOW, Oct 9 (Reuters) United Company RUSAL plans to build the world's largest aluminium smelter in Russia's Saratov region and to finance the expansion of a nuclear power plant to supply energy to the complex, the company said on Tuesday.
UC RUSAL said in a statement it would build two new reactor blocks at the Balakovsky nuclear power plant, generating 2,000 megawatts for supply to an aluminium smelter with annual capacity of 1.05 million tonnes.
The company, majority owned by Russian billionaire Oleg Deripaska, said it signed an agreement with the government of the Saratov region, which sits on the Volga River.
It said the budget for the project would be determined on completion of a feasibility study expected by the end of 2008.
''It will enable our company to strengthen its power base through the construction of one of the most environmentally friendly energy sources, as well as growing aluminium production by over 25 percent,'' Chief Executive Alexander Bulygin said.
United Company RUSAL produced 4 million tonnes of aluminium last year, making it the world's largest producer, and has separately unveiled plans to raise output 65 percent by 2013.
The Saratov project is in addition to these plans and will become effective after the construction of the second stage of the Balakovsky power plant is approved by Russian atomic energy agency Rosatom.
The company did not say when the project would be completed.
UC RUSAL was formed through a merger of the world's third-largest largest primary aluminium producer, Russia's RUSAL, with smaller domestic rival SUAL and aluminium assets belonging to commodities trader Glencore.
RUSAL has 66 percent of the united company, SUAL 22 percent and Glencore 12 percent.
REUTERS SR PM1459