The world's top aluminium firm United Company Rusal said it had signed a memorandum of understanding with Libya to build an aluminium smelter in Libya with an annual capacity of 600,000 tonnes.

The parties also have agreed to build a 1,500 megawatt gas power station to supply energy to the smelter, UC Rusal said in a statement.

The natural gas for the complex will be supplied by the National Oil Company of Libya (NOC) under a contract intended to last at least 30 years, it said.

UC Rusal and Libya have agreed to create a joint venture for the complex with UC Rusal holding 60 percent and Libya the balance.

The deal includes a pre-feasibility study of the technical, economic and financial parameters of the proposed complex.

If the results of the study are positive, the parties plan to sign a final agreement to establish the joint venture in 2009 and to start construction of the gas power station and the aluminium smelter in 2010.

'This memorandum of understanding marks another significant move forward in implementing the company's strategy of strengthening our position in the global market,' UC Rusal CEO Alexander Bulygin said in the company statement.

The company's strategy is to increase its competitiveness by establishing energy and metals complexes in strategically important regions, Bulygin said.

The aluminium produced by the complex in Libya, the North African country's first, will serve both the domestic demand as well as European clients, UC Rusal said.

UC Rusal was formed in March 2007 by a merger between Russian producers Rusal and Sual, and the assets of Switzerland-based commodities trader Glencore.

Billionaire Oleg Deripaska owns 56.76 percent of UC Rusal, Sual shareholders 18.92 percent and Glencore 10.32 percent.

Tycoon Mikhail Prokhorov has a 14 percent stake, which he obtained in exchange for a 25 percent plus two shares in the world's top nickel producer Norilsk Nickel.

UC Rusal has said it plans to increase its aluminium output 60 percent by 2015 from 4.2 million tonnes in 2007. - Reuters