United Company RUSAL
Encyclopedia
United Company RUSAL is the world's largest aluminium
Aluminium
Aluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances....

 company, with headquarters in Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...

, Russian Federation. UC RUSAL accounts for almost 11% of the world's primary aluminium output and 13% of the world’s alumina production. The United Company was formed by the merger of RUSAL , SUAL, and the alumina assets of Glencore
Glencore
Glencore International plc is a multinational mining and commodities trading company headquartered in Baar, Switzerland and with its registered office in Saint Helier, Jersey...

, completed in March 2007. The company operates in 19 countries over five continents and employs over 75,000 people across its international operations and offices. United Company RUSAL incorporated in Jersey
Jersey
Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...

. The company has its financial centre operating from Jersey.

History

RUSAL is the global leader in the aluminium industry and accounts for approximately 12% of global aluminium production and 13% of the world’s alumina output. It has played a decisive role in the consolidation of the Russian aluminium industry during its establishment as a large, vertically integrated aluminium holding.

1930-1980

The Russian aluminium industry dates back to 1932, the year when the Volkhov aluminium smelter produced the first batch of aluminium. Following that, construction of smelters began to meet the growing demand of the national economy. During WW2, the production facilities in the country were evacuated to the Urals and Western Siberia
Siberia
Siberia is an extensive region constituting almost all of Northern Asia. Comprising the central and eastern portion of the Russian Federation, it was part of the Soviet Union from its beginning, as its predecessor states, the Tsardom of Russia and the Russian Empire, conquered it during the 16th...

, and the relocated equipment was used to build the Bogoslovsk and Novokuznetsk aluminium smelters. In the 1950s, new aluminium smelters were built for strategic purposes in Kandalaksha
Kandalaksha
Kandalaksha is a town in Kandalakshsky District of Murmansk Oblast, Russia, located at the head of Kandalaksha Gulf on the White Sea, beyond the Arctic Circle. Population: 40,564 ; -History:The settlement has existed since the 11th century...

, Nadvoitsy
Nadvoitsy
Nadvoitsy is an urban locality in Segezhsky District of the Republic of Karelia, Russia, located on the shore of Lake Vygozero, north of Petrozavodsk. Population:...

 and Volgograd
Volgograd
Volgograd , formerly called Tsaritsyn and Stalingrad is an important industrial city and the administrative center of Volgograd Oblast, Russia. It is long, north to south, situated on the western bank of the Volga River...

. In the 1960s and 1970s, smelters in Irkutsk
Irkutsk
Irkutsk is a city and the administrative center of Irkutsk Oblast, Russia, one of the largest cities in Siberia. Population: .-History:In 1652, Ivan Pokhabov built a zimovye near the site of Irkutsk for gold trading and for the collection of fur taxes from the Buryats. In 1661, Yakov Pokhabov...

, Krasnoyarsk
Krasnoyarsk
Krasnoyarsk is a city and the administrative center of Krasnoyarsk Krai, Russia, located on the Yenisei River. It is the third largest city in Siberia, with the population of 973,891. Krasnoyarsk is an important junction of the Trans-Siberian Railway and one of Russia's largest producers of...

, and Bratsk
Bratsk
Bratsk is a city in Irkutsk Oblast, Russia, located on the Angara River near the vast Bratsk Reservoir. Population: Although the name sounds like the Russian word for 'brother' , it actually comes from 'bratskiye lyudi', an old name for the Buryats.-History:The first Europeans in the area arrived...

 were constructed in close proximity to the largest hydro power plants in Siberia. By the early 1980s, Russia was the world’s second largest producer of aluminium after the US.

Russia has been historically short of bauxite
Bauxite
Bauxite is an aluminium ore and is the main source of aluminium. This form of rock consists mostly of the minerals gibbsite Al3, boehmite γ-AlO, and diaspore α-AlO, in a mixture with the two iron oxides goethite and hematite, the clay mineral kaolinite, and small amounts of anatase TiO2...

, which is used to produce alumina, the main raw material in the aluminium production process. Due to the weak development of raw materials production in Russia, and amid growing aluminium output, the domestic producers were forced to purchase alumina from other countries like Guinea and India.

1990-2000

In the early 1990s, as Russia was going through market reforms, its aluminium industry was hit hard by the economic downturn and the political uncertainty that the country experienced in the years following the collapse of the USSR. The ‘shock therapy’ economic measures mostly hit the defence and engineering industries, the key consumers in the Russian aluminium sector. Alumina refineries in Ukraine, Kazakhstan, and Azerbaijan became foreign operations located in the independent countries, while Russian production facilities were only able to meet 40% of business demand for raw aluminium materials. Following the collapse of the USSR, the lack of raw material sources, the closed nature of the Soviet economy and poor ties with global alumina producers jeopardised the aluminium industry in the country. By 1994, aluminium consumption in Russia fell to around 2 kg per capita, compared with 17 kg per capita in 1990. The only way the industry could survive was to re-orient itself towards external markets; and so in 1992 export of aluminium exceeded 1 mln tonnes for the first time.

In 1993, the Russian government launched the privatisation of the aluminium industry. International traders who obtained access to Russia’s largest aluminium smelters during the privatisation were not interested in developing the sector and did not invest in production, opting for immediate profits instead.

Russian businessman Oleg Deripaska
Oleg Deripaska
Oleg Vladimirovich Deripaska is the Russian Chief executive officer of Basic Element company and a member of the Board of Directors and CEO of United Company RUSAL, a Russian aluminium industry company...

 started his business as a commodities agent and broker at the Moscow Trade Stock Exchange (Moskovskaya Tovarnaya Birzha (MTB)) and then at the Russian Commodities and Raw Materials Exchange (Rossiyskaya Tovarno-Syryevaya Birzha (RTSB)), dealing in a wide range of commodities, including aluminium. His work included trading with major Russian aluminium smelters. Between 1991 and 1994, companies set up by Mr. Deripaska started investing trading profits in the shares of Sayanogorsk Aluminum Smelter (SAZ), one of the newest and most modern aluminium plants built in Soviet times (1980–1985). In 1994, Mr. Deripaska was elected the General Director of SAZ.

Since then, gradual strategic acquisitions and growth projects have led to the creation of the world’s largest aluminium and alumina producer, based on production in 2008. RUSAL has historically adopted the policy of fully integrating assets it acquires and controls under centralised operational and management control. The company has achieved increased production and efficiency in most of its acquired facilities through so-called production “creep” (improvements achieved through targeted improvements to key processes), as well as by undertaking key modernisation and expansion projects.

In 1997, as part of a general restructuring of the companies controlled by Mr. Deripaska, Sibirsky Aluminium was established to manage aluminium and alumina assets acquired by companies related to Mr. Deripaska. By 2000, Sibirsky Aluminium managed, among other aluminium-related assets, majority interests in the Sayanogorsk aluminium smelter, the Sayanal foil mill, a fabricating plant in Samara, Russia, and a minority interest in the Nikolaev alumina refinery in Ukraine.

2000-2010

In 2000, Sibirsky Aluminium and Millhouse Capital
Millhouse Capital
Millhouse Capital is a Russian holding company, whose current CEO is Roman Abramovich, a business associate of Oleg Deripaska. They are among the "New Money Oligarchs" whose rise to prominence and wealth was fostered by the Yeltsin administration....

 agreed to manage jointly the aluminium and alumina assets they controlled and founded RUSAL. By 2002, Sibirsky Aluminium and Millhouse Capital were managing controlling stakes in the Armenal foil mill in Armenia and the Belaya Kalitva
Belaya Kalitva
Belaya Kalitva is a town and the administrative center of Belokalitvinsky District of Rostov Oblast, Russia. Population: -External links:*...

 metallurgical plant and Novokuznetsk aluminium smelter in Russia, and also took under management the Friguia bauxite and alumina complex and Bauxite of Kindia Company in Guinea to secure bauxite and alumina supply for its Russian smelters.

In 2003, companies related to Mr. Deripaska increased their stake in those companies under common management to 75% by acquiring half of the interest managed by Millhouse Capital. In Ukraine, RUSAL increased its share in the Nikolaev alumina refinery to 98%.

In 2004, the consolidation of RUSAL’s ownership by companies related to Mr. Deripaska was completed with the acquisition of the remaining 25% equity interest in RUSAL managed by Millhouse Capital. At this time, RUSAL made the strategic decision to focus on the upstream business and began disposing of its downstream assets, including the sale of its fabricating division to Alcoa
Alcoa
Alcoa Inc. is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries...

 in January 2005. This divestiture process was largely completed in 2006 with the distribution of certain aluminium construction plants and other non-core assets to companies controlled by RUSAL’s beneficial owner.

Having completed integration in Russia, RUSAL still required additional sources of raw materials, and so it began an active international expansion. Within four years after its creation, RUSAL had established its presence on all five continents and included Guinea, Australia, Guyana, China, and Nigeria in its geographical portfolio.

From 2004 to 2006, RUSAL acquired several strategically important assets. In 2004, RUSAL acquired a 90% interest in the Boxitogorsk alumina refinery in Russia and increased its holding in the Nikolaev alumina refinery to 100%. In 2005, RUSAL bought a 50% stake in the Komi alumina project from SUAL and became its partner in the project, which involved the construction of an integrated bauxite and alumina complex in Russia’s Komi Republic
Komi Republic
The Komi Republic is a federal subject of Russia .-Geography:The republic is situated to the west of the Ural mountains, in the north-east of the East European Plain...

. In the same year, RUSAL completed the acquisition of a 20% equity interest in one of the world’s largest alumina refineries in terms of production capacity, Queensland Alumina Limited, located in Queensland, Australia. RUSAL’s joint venture partner in Queensland Alumina Limited is Rio Tinto
Rio Tinto Group
The Rio Tinto Group is a diversified, British-Australian, multinational mining and resources group with headquarters in London and Melbourne. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain from the...

.

In 2005, RUSAL purchased assets of a cathode plant in Lingshi County
Lingshi County
Lingshi County is a county of Shanxi, China. It is under the administration of Jinzhong city.-References:*...

 of Shanxi Province, China. In April 2008, the company acquired assets of another cathode plant in Taigu County
Taigu County
Taigu County is a county of Shanxi, China. It is under the administration of Jinzhong city. It located at 37°25'N 112°33'E.-External links:*...

 of Shanxi Province, China, which have been integrated into the existing cathode plant in Lingshi.

In 2006, RUSAL acquired assets of the Aroaima Mining Company in Guyana, acquired the remaining equity interest in the Friguia bauxite and alumina complex in Guinea, completed an extensive retrofit of the Armenal foil mill and commissioned the Khakas aluminium smelter in Russia — one of the most advanced aluminium production facilities in the world. RUSAL also acquired a 56.16% equity interest in the Italian alumina refinery, Eurallumina.

In May 2006, RUSAL and RusHydro
RusHydro
RusHydro , previously known as Hydro-OGK, is a Russian hydroelectricity company. As of 2008 it has a capacity of 25 gigawatts. It is the world's second-largest hydroelectric power producer and is the country's largest power-generating company and the largest successor to RAO UES...

 signed a co-operation agreement for the construction of the Boguchanskaya hydropower station (HPP) and the Boguchansky aluminium smelter. RUSAL increased ownership in the Bratsk
Bratsk
Bratsk is a city in Irkutsk Oblast, Russia, located on the Angara River near the vast Bratsk Reservoir. Population: Although the name sounds like the Russian word for 'brother' , it actually comes from 'bratskiye lyudi', an old name for the Buryats.-History:The first Europeans in the area arrived...

, Krasnoyarsk
Krasnoyarsk
Krasnoyarsk is a city and the administrative center of Krasnoyarsk Krai, Russia, located on the Yenisei River. It is the third largest city in Siberia, with the population of 973,891. Krasnoyarsk is an important junction of the Trans-Siberian Railway and one of Russia's largest producers of...

, Sayanogorsk
Sayanogorsk
Sayanogorsk is a town in the Republic of Khakassia, Russia, located on the left bank of the Yenisei River, south of Abakan and about east of the railway station on the line Kamyshta which goes from Abakan to Abaza. Population: -Economy:...

, and Novokuznetsk
Novokuznetsk
Novokuznetsk is a city in Kemerovo Oblast, Russia. It serves as the administrative center of Novokuznetsky District, but it is not administratively a part of it...

 aluminium smelters, the Achinsk
Achinsk
Achinsk is a city in Krasnoyarsk Krai, Russia, located on the right bank of the Chulym River near its intersection with the Trans-Siberian Railway, west of Krasnoyarsk. Area: . Population:...

 and Boksitogorsk
Boksitogorsk
Boksitogorsk is a town and the administrative center of Boksitogorsky District of Leningrad Oblast, Russia, located on the Pyardomlya River east of St. Petersburg. Population: -History:...

 alumina refineries and the Russian National Aluminium and Magnesium Institute (VAMI) to 100% in November 2006, and in Sayanal in June 2007.

Long-term competitiveness is impossible without a solid in-house research and design platform. The VAMI and SibVAMI aluminium and magnesium research institutes became the backbone for engineering and technology centres involved in the development of new unique production technologies including RA-300 and RA-400 reduction cells for RUSAL. The new technologies allowed for large-scale greenfield
Greenfield project
In many disciplines a greenfield is a project that lacks any constraints imposed by prior work. The analogy is to that of construction on greenfield land where there is no need to remodel or demolish an existing structure...

 and brownfield projects. In 2005, RUSAL created its own engineering and construction subsidiary responsible for modernisation and construction projects.

In December 2006, RUSAL acquired through a privatisation process a 77.5% equity interest in the Aluminium Smelter Company of Nigeria (ALSCON). The Group acquired a further 7.5% equity interest in ALSCON from MAN Ferrostaal
MAN Ferrostaal
Ferrostaal is a provider of industrial services. With 4,400 employees and an annual turnover of euro 1.6 billion euro , Ferrostaal serves customers in more than 60 countries worldwide. Ferrostaal provides industrial services in two areas: Projects and Services...

 AG in January 2008.

In late March 2007, the merger between RUSAL, SUAL and alumina assets of Glencore
Glencore
Glencore International plc is a multinational mining and commodities trading company headquartered in Baar, Switzerland and with its registered office in Saint Helier, Jersey...

 created UC RUSAL including 16 aluminium smelters, 12 alumina refineries, eight bauxite mines, three powder metallurgy plants, three silicon smelters, three secondary aluminium plants, three aluminium foil mills, two cryolite
Cryolite
Cryolite is an uncommon mineral identified with the once large deposit at Ivigtût on the west coast of Greenland, depleted by 1987....

 plants, and one cathode plant. This transaction completed the 15-year process of consolidating the Russian aluminium industry, and created the world’s largest aluminium producer (based on production in 2008) with operations in 19 countries across five continents and more than 75,000 employees.

In 2008, RUSAL produced 4.4 million tonnes of aluminium and 11.2 million tonnes of alumina. In November 2007, RUSAL signed a cooperation agreement with Samruk-Energo, a subsidiary of Samruk-Kazyna
Samruk-Kazyna
Samruk-Kazyna , officially known as the National Welfare Fund "Samruk-Kazyna", is a joint stock company in Kazakhstan which owns, either in whole or in part, many important companies in the country, including the national rail and postal service, the state oil and gas company KazMunayGas, the state...

, on the creation of a 50/50 joint venture in respect of the operation of the LLP Bogatyr Komir, the largest coal mining company in Kazakhstan, with an annual production of approximately 40 million tonnes of coal, that ensured stable fuel supply to Urals thermal power stations that provide electricity for RUSAL’s Urals plants.

In April 2008, the Group completed the acquisition from Onexim of a 25% plus one share equity interest in Norilsk Nickel, the world’s largest nickel and palladium producer. The acquisition allowed the Group to diversify its asset base. The consideration for the shares in Norilsk Nickel was partially paid in cash and partially in shares. This strategic transaction paved the way to develop RUSAL into a global, diversified metals, mining and energy group.
As of December 2009, En+ Group owns a 53.35% stake in the United Company, SUAL’s shareholders hold 17.78%, 19.46% is owned by ONEXIM, and the remaining 9.70% is owned by Amokenga Holdings, a wholly owned subsidiary of Glencore.

In January 2010, RUSAL was listed on the Hong Kong Stock Exchange
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...

 with its IPO price of HK$10.8 per share and capital raising of US$2.6 billion. The IPO attracted a list of big-name investors including Nathaniel Rothschild
Nathaniel Rothschild
Nathaniel Rothschild may refer to:* Nathan Mayer Rothschild , founder of the Rothschild banking family of England* Nathaniel de Rothschild , banker and vintner, Château Mouton Rothschild...

, Robert Kuok
Robert Kuok
Robert Kuok Hock Nien , is an influential Malaysian Chinese businessman. According to Forbes his net worth is estimated to be around $12.5 billion on May 2011, making him the richest person in Malaysia and Southeast Asia....

, Paulson & Co, John Paulson
John Paulson
John Alfred Paulson is an American hedge fund manager, he is the founder and President of Paulson & Co., a New York-based hedge fund....

 and Vneshekonombank.

Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

Rusal owns and operates six aluminium smelters, two alumina refineries and two foil rolling mills in Russia:
  • Bratsk Aluminium Smelter, Bratsk
    Bratsk
    Bratsk is a city in Irkutsk Oblast, Russia, located on the Angara River near the vast Bratsk Reservoir. Population: Although the name sounds like the Russian word for 'brother' , it actually comes from 'bratskiye lyudi', an old name for the Buryats.-History:The first Europeans in the area arrived...

  • Irkutsk Aluminium Smelter, Shelekhov
    Shelekhov
    Shelekhov is a town in Irkutsk Oblast, Russia, located southwest of Irkutsk. Population: It was founded in the early 1950s due to the construction of an aluminum plant. In 1956, it was named Shelekhov after a Russian explorer Grigory Shelekhov. For some reason, the authorities used the incorrect ...

  • Krasnoyarsk Aluminium Smelter, Krasnoyarsk
    Krasnoyarsk
    Krasnoyarsk is a city and the administrative center of Krasnoyarsk Krai, Russia, located on the Yenisei River. It is the third largest city in Siberia, with the population of 973,891. Krasnoyarsk is an important junction of the Trans-Siberian Railway and one of Russia's largest producers of...

  • Novokuznetsk Aluminium Smelter, Novokuznetsk
    Novokuznetsk
    Novokuznetsk is a city in Kemerovo Oblast, Russia. It serves as the administrative center of Novokuznetsky District, but it is not administratively a part of it...

  • Sayanogorsk Aluminium Smelter, Sayanogorsk
    Sayanogorsk
    Sayanogorsk is a town in the Republic of Khakassia, Russia, located on the left bank of the Yenisei River, south of Abakan and about east of the railway station on the line Kamyshta which goes from Abakan to Abaza. Population: -Economy:...

  • Khakas Aluminium Smelter
    Khakas Aluminium Smelter
    Khakas Aluminium Smelter or KhAZ is an aluminium smelter located near Sayanogorsk, Russia. Owned by the Russian aluminium industry champion RUSAL, it is one of the largest companies in the Russia's Republic of Khakassia. It was the first major aluminium plant opened in post-Soviet Russia.The...

    , Sayanogorsk
    Sayanogorsk
    Sayanogorsk is a town in the Republic of Khakassia, Russia, located on the left bank of the Yenisei River, south of Abakan and about east of the railway station on the line Kamyshta which goes from Abakan to Abaza. Population: -Economy:...

  • Bogoslovsk Aluminium Smelter
  • Achinsk Alumina Refinery
  • Boksitogorsk Alumina Refinery
  • SAYANAL foil rolling mill
  • Urals Foil

A new Boguchany Aluminium Smelter
Boguchany Aluminium Smelter
Boguchany Aluminium Smelter is a Russian aluminium smelter currently being constructed near the settlement of Tayozhny, in the Boguchansky District of Krasnoyarsk Krai. It is one of the largest development projects of the RUSAL company, which builds this new aluminium plant in the partnership with...

 is currently under construction, expected to be launched in 2012.

Armenia
Armenia
Armenia , officially the Republic of Armenia , is a landlocked mountainous country in the Caucasus region of Eurasia...

  • RUSAL ARMENAL
    RUSAL ARMENAL
    RUSAL ARMENAL is a wholly owned subsidiary of RUSAL which runs an aluminum foil mill in the Arabkir district of Yerevan, Armenia. The premises of the mill was formerly known as the Kanaker aluminum smelter, which was commissioned in 1950, and became one of the largest aluminum foil mills in the...

     aluminum foil mill, Yerevan
    Yerevan
    Yerevan is the capital and largest city of Armenia and one of the world's oldest continuously-inhabited cities. Situated along the Hrazdan River, Yerevan is the administrative, cultural, and industrial center of the country...

    . Formerly known as the Kanaker aluminium smelter.

Guinea
Guinea
Guinea , officially the Republic of Guinea , is a country in West Africa. Formerly known as French Guinea , it is today sometimes called Guinea-Conakry to distinguish it from its neighbour Guinea-Bissau. Guinea is divided into eight administrative regions and subdivided into thirty-three prefectures...

  • Alumina Company of Guinea
    Alumina Company of Guinea
    The Alumina Company of Guinea is a bauxite mining company based in Fria, Guinea. They are the main aluminium producing company in the country, and was once part-owned by the government of Guinea in Conakry and by the Reynolds Metals Company of Richmond, Virginia of the United States...

     (ACG) - Friguia alumina production facilities
  • Compagnie des Bauxites de Kindia - development of the Debele bauxite deposit
  • Compagnie de Bauxite et d'Alumine de Dian - in Dian Dian

Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...

  • Aluminium Smelter Company of Nigeria (ALSCON) - Smelter in Akwa Ibom
    Akwa Ibom
    Akwa Ibom is a state in Nigeria named after the Qua Iboe river. It is located in the coastal South-Southern part of the country, lying between latitudes 4°321 and 5°331 North, and longitudes 7°251 and 8°251 East...

     state of Nigeria
    Nigeria
    Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...


Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

  • KUBAL - Kubal is one of the largest industrial facilities in Central Sweden and the only primary aluminium producer in the country.

See also

  • Aluminium: The Thirteenth Element
  • Aluminium in Russia
  • Aluminium in Africa
    Aluminium in Africa
    Aluminium in Africa originates primarily in Guinea, Mozambique and Ghana. Guinea is by far the biggest producer in Africa, and is a world leader in aluminium and bauxite production; see "World bauxite mine production, reserves, and reserve base" at the bauxite article.There are many companies...

  • Aluminium in Guinea
  • List of alumina refineries

External links

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