overview of ord - huge potential, page-117

Ord River gambles on gap in alumina market

A lack of pure play alumina stocks at a time of growing investor demand has shaped ORD's decision to float its SARCO joint venture with NFC.

ORD last week announced the appointment of RBC as lead manager on an initial public offering for SARCO that is expected to take place around the end of the year and raise $200m.

It will provide a portion of the funding for a $600m mine and refinery operation in Laos capable of producing an initial 600,000 tonnes of alumina a year. The balance will come from Chinese lenders.

ORD and NFC are both expected to maintain substantial holdings in SARCO after the listing, meaning the company could be valued at a multiple of $200m.

That would make it the second largest alumina stock on the ASX after Alumina.

Construction of the refinery is expected to take 18-24months ORD believes it will be easy to double capacity to 1.2m tonnes once it has ben established.

There are plans to pursue other projects in Laos, Guinea and Indonesia to increase production further.

Excerpt from todays AFR