It paves the way for a pilot project launched in March this year to be carried out in major aluminium-producing regions.

According to the deal between Fushun Aluminium Smelter, a wholly-owned subsidiary of Chinalco in Liaoning Province, and Huaneng Yimin Power Plant in Inner Mongolia, Fushun will pay RMB17/MWh to Northeast Power Grid and RMB100/MWh to Liaoning Provincial Power Grid for power transmission and distribution fees for the electricity generated by Huaneng Yimin.

The deal makes electricity price purchased by Fushun Aluminium directly from Huaneng Yimin Power plant RMB 90/MWh cheaper than the normal price.

That means the smelter could save as much as RMB270M/y if all electricity comes from the Huaneng Yimin plant.

This is the first direct power purchase deal in China, although the experiment was launched in March this year.

However, little headway was made in the months that followed due to deadlock in negotiations with power companies.

Source: China Metals e-mail infochn@public.bta.net.cn