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Rusal

From Alfawiki
United Company RUSAL
Company typePublic (listed on Moscow, Hong Kong, and European stock exchanges)
IndustryAluminium production
FoundedMarch 2007
FounderOleg Deripaska
Headquarters
Moscow
,
Russia
Area served
Worldwide (facilities in 13 countries on five continents)
Key people
Vladislav Solovyov (CEO as of 2014), Oleg Deripaska (Founder and President as of 2014)
ProductsPrimary aluminium, alumina
Number of employees
61,000+
ParentEn+ Group (majority shareholder)

United Company RUSAL () ranks as the world's second-largest producer of primary aluminium as of 2016, contributing close to 9% of the global output in both primary aluminium and alumina. Established by Russian entrepreneur Oleg Deripaska, Rusal maintained its position as the top aluminium manufacturer until it was surpassed by China Hongqiao Group in 2015.

The corporation was created in March 2007 through the consolidation of Rusal (), SUAL, and Glencore's alumina operations. It runs facilities in 13 nations spanning five continents and employs more than 61,000 individuals globally.

Although incorporated in Jersey with its financial center located there, Rusal’s main office is situated in Moscow, Russia. The company is listed on stock exchanges in Moscow, Hong Kong, and Europe. On 25 September 2020, Rusal transferred its legal domicile from Jersey to Kaliningrad, Russia. In 2021, the firm announced plans to separate its high carbon divisions and rebrand under the name AL+.

Early foundations 1991–2000

The roots of UC Rusal can be traced back to Russian businessman Oleg Deripaska, who started his career in metals as a commodities broker at the Moscow Trade Stock Exchange and later at the Russian Commodities and Raw Materials Exchange. His trading activities included aluminium, through which he developed relationships with leading Russian aluminium smelters.

From 1991 to 1994, enterprises supported by Deripaska and industrialist Michael Cherney acquired shares in Sayanogorsk Aluminum Smelter (SAZ), a modern Soviet-era production facility. In 1994, Deripaska was appointed General Director of SAZ.

In 1997, Deripaska’s companies underwent restructuring to establish Sibirsky Aluminium, which managed aluminium and alumina assets such as majority ownership of SAZ, the Sayanal foil mill, a fabrication plant located in Samara, and a minority stake in Ukraine’s Nikolaev alumina refinery.

Formation of Rusal and growth phase 2000–2007

Rusal became one of the world’s leading aluminium and alumina producers through strategic acquisitions and development projects. The company centralized operational management to boost production efficiency by implementing focused upgrades and modernization programs.

The company was founded in 2000 when Sibirsky Aluminium merged its aluminium and alumina holdings with Roman Abramovich's Millhouse Capital.

By 2002, this merged entity held stakes in the Armenal foil mill (Armenia), Belaya Kalitva metallurgical facility, Novokuznetsk aluminium smelter (Russia), as well as bauxite and alumina resources in Guinea to secure raw materials for Russian smelters. That same year, Rusal also inaugurated its Engineering and Technology Center in Krasnoyarsk to foster internal research and development.

In 2003, Millhouse Capital divested its 50% interest to Basic Element, controlled by Deripaska. At this time, Rusal increased its ownership in the Nikolaev alumina refinery to 98%.

Concentrating on upstream operations, Rusal sold off downstream assets between 2004 and 2006, including disposing of its fabrication division to Alcoa in 2005. In 2004, it secured a license for bauxite mining activities in Guyana by establishing the Bauxite Company of Guyana.

Between 2004 and 2006, Rusal expanded its global footprint by acquiring a 90% share in Russia’s Boxitogorsk alumina refinery; full control over Nikolaev alumina refinery; a half interest in the Komi alumina project; a 20% stake in Queensland Alumina Limited (Australia); and cathode plant operations located in Shanxi Province, China.

In 2006, Rusal purchased assets from Guyana’s Aroaima Mining Company, completed upgrades at the Armenal foil mill, commissioned Russia’s Khakas aluminium smelter—recognized among the most technologically advanced worldwide—and acquired a majority (56.16%) stake in Italy’s Eurallumina refinery.

A collaboration agreement was signed with RusHydro in May 2006 for development of the Boguchanskaya hydropower plant alongside an aluminium smelter. By late 2006 through mid-2007, Rusal secured full ownership over several Russian smelting and alumina refining facilities.

The company utilized research institutes VAMI and SibVAMI as engineering hubs to develop proprietary technologies such as RA-300 and RA-400 reduction cells supporting large-scale greenfield and brownfield projects. In 2005, it launched Rusal-Engineering Development Limited dedicated to modernization initiatives.

In December 2006, Rusal acquired a controlling interest (77.5%) in Nigeria's Aluminium Smelter Company (ALSCON) through privatization; this stake was further increased by an additional 7.5% from MAN Ferrostaal AG in January 2008.

UC Rusal

In March 2007, the fusion of Rusal, its domestic rival SUAL, and the bauxite and alumina assets from Swiss commodities firm Glencore resulted in the establishment of UC Rusal, which became the largest aluminium producer worldwide at that time. The company managed operations in 17 countries across five continents, encompassing 16 aluminium smelters, 12 alumina refineries, eight bauxite mines, along with various auxiliary facilities. Upon finalization, UC Rusal reported pro-forma revenues of $12 billion and boasted a production capacity close to four million tonnes of aluminium and 11 million tonnes of alumina.

Consolidation and Growth Initiatives

In November 2007, Rusal entered into a 50/50 joint venture with Samruk-Energo to operate Bogatyr Komir LLP, the leading coal mining enterprise in Kazakhstan.

After a series of assertive mergers and acquisitions—including that of Norilsk Nickel—UC Rusal encountered substantial debt levels exacerbated by the 2008 financial downturn. To preserve its stake in Norilsk Nickel without incurring foreign lender exposure, UC Rusal obtained a $4.5 billion loan from Russian state bank Vnesheconombank aimed at repaying foreign liabilities. By 2009, the company had reduced operational expenses by 25% and successfully negotiated a $17 billion debt refinancing agreement involving 72 creditors.

Oleg Deripaska assumed the role of CEO in January 2009, succeeding Alexander Bulygin. In January 2010, UC Rusal completed its initial public offering on the Hong Kong Stock Exchange, raising $2.2 billion at HK$10.8 per share. This IPO attracted notable investors including Nathaniel Rothschild, Robert Kuok, Paulson & Co, and Vnesheconombank. Additionally, the company’s global depository receipts are traded on NYSE Euronext in Paris.

By August 2011, Rusal extended its debt maturities to 2016 through an agreement with Sberbank, effectively replacing an earlier loan from VEB. In October of the same year, UC Rusal finalized refinancing for $11.4 billion in outstanding debt, which lifted investment and dividend limitations and facilitated modernization efforts along with new smelter development projects in Siberia.

In response to increasing aluminium demand from China, UC Rusal established a joint venture with China North Industries Corporation (NORINCO) in April 2012 and signed a memorandum of understanding with competitor Shandong Xinfa Group to explore potential joint ventures.

March 2014 marked the formation of a 50/50 joint venture between UC Rusal and Israeli automotive parts manufacturer Omen High Pressure Die Casting aimed at producing automotive components.

Between 2007 and 2013, global aluminium prices fell due to overcapacity issues in China, culminating in a $3.2 billion loss for Rusal in 2014. The company negotiated deferred payments on its $10 billion net debt with lenders approving restructuring plans by August that year.

In November 2014, Vladislav Solovyov was appointed CEO while Oleg Deripaska took on the role of company president.

UC Rusal further broadened its partnerships in China through a joint venture with Hebei Joy Sense Cable Co. in 2016 to manufacture aluminium cables for electrical use.

In 2017, Rusal issued two Eurobonds amounting to $1.1 billion to refinance existing debt and became the first foreign entity to issue panda bonds on the Shanghai Stock Exchange valued at 10 billion yuan. The company also secured a $1.7 billion pre-export finance facility from international financiers.

April 2017 saw the launch of a joint venture with Indian firm Runaya Metsource focused on producing aluminum paste and powder, with commercial operations expected to commence in 2018. In 2021, UC Rusal reported revenues totaling 596 billion rubles.

In April 2022, Rusal America Corporation was divested to former executives Brian Hesse and Andrey Donets and rebranded as PerenniAL.

Most recently, in October 2023, Rusal acquired a 30% ownership interest in China's Hebei Wenfeng New Materials (HWNM) for $261.6 million.

Corporate structure and operations

In 2016, the principal shareholders of UC Rusal included En+ Group, which held a dominant 48.13% stake, followed by Onexim Group with 13.7%, and SUAL owning 15.80%. Amokenga Holdings possessed 8.75%, Toni Shterev controlled 0.1%, while the remaining 13.37% consisted of public shares and management holdings (0.25%). On 11 August 2017, Onexim agreed to transfer 7% of its Rusal shares to SUAL, after having previously sold 3.3% earlier that year. Upon regulatory approval, Onexim’s ownership would decrease to 6.7%, whereas SUAL’s share would increase to 22.80%.

By the year 2023, En+ Group had expanded its controlling interest to 56.88%, with SUAL holding 25.52%, and the free-floating shares representing 17.6%.

Financial results
Year ended 31 December (USD million) 2020 2019 2018 2017 2016
Revenue 8,566 9,711 10,280 9,969 7,983
Net income 759 960 1,698 1,222 1,179
Total assets 17,378 17,814 15,777 15,774 14,452
Production volumes (million tonnes)
2020 2019 2018 2017 2016
Aluminium 3.8 3.8 3.8 3.7 3.7
Alumina 8.2 7.9 7.8 7.8 7.5

Operational facilities

At the close of 2020, UC Rusal managed nine aluminium smelting plants, nine alumina processing refineries, seven bauxite extraction sites worldwide, along with four foil rolling mills located domestically.

Russian Federation

Within Russia, Rusal owns and runs eight aluminium smelters, four alumina refineries, and three foil rolling mills:

Sweden
  • Kubal represents one of Central Sweden’s largest industrial operations and stands as the nation’s only primary aluminium producer.
Nigeria
  • Aluminium Smelter Company of Nigeria (ALSCON), situated in Akwa Ibom state.
Russia
  • Achinsk Aluminium Refinery
  • Boksitgorsk
  • Bogoslovsk
  • Urals
Guinea
  • Friguia Aluminium Refinery
Australia
Italy
  • Eurallumina Alumina Refinery
Ireland
  • Rusal’s Aughinish facility, recognized as Europe’s largest bauxite processing refinery.
Jamaica
  • Windalco
Ukraine
Russia
Guinea
  • Compagnie des Bauxites de Kindia
  • Friguia Bauxite and Alumina Complex
  • Dian-Dian Project
Guyana

Foil rolling mills

  • Sayanal
  • Ural Foil
  • Armenal
  • Sayanskaya Folga

Collaborative ventures

  • UC Rusal – RusHydro, 2005
  • UC Rusal – China North Industries Corporation (NORINCO), 2012
  • UC Rusal – Omen High Pressure Die Casting, 2014
  • UC Rusal – Hebei Joy Sense Cable Co. (HJSC), 2016
  • UC Rusal – Runaya Metsource, 2017
  • UC Rusal – SKAD, 2017
  • UC Rusal – Braidy Industries Inc., 2019

2018 U.S. sanctions

In April 2018, the United States imposed sanctions targeting Oleg Deripaska and his affiliated companies, including Rusal, due to Russia’s "malign activity." The U.S. Treasury Department accused Deripaska of offenses such as unlawful wiretapping, extortion, racketeering, and associations with organized crime groups. Nevertheless, the Treasury granted extended compliance periods for customers of Rusal America Corporation and indicated the possibility of lifting sanctions if Deripaska relinquished control.[1]

To lessen the sanctions' effects on the company, CEO Alexandra Bouriko and seven members of the board resigned in May 2018.

By January 2019, sanctions were removed after Deripaska reduced his ownership stake below 50% and voting rights under 35%. The decision was supported by U.S. Senate Majority Leader Mitch McConnell, who emphasized balancing pressure on Deripaska with maintaining market stability. In April 2019, Rusal revealed plans for a facility in Greenup, Kentucky dedicated to manufacturing flat-rolled aluminum products for the American automotive industry.

Sustainability

UC Rusal committed in 2017 to powering all its aluminum smelting operations exclusively with clean energy sources—mainly hydropower—by 2020. At that time, renewable energy accounted for approximately 90% of its consumption. This initiative was consistent with its earlier commitment in 2015 to promote sustainable aluminum production through participation in the Aluminium Stewardship Initiative.

Addressing growing demand from automotive, packaging, and electronics industries for environmentally friendly aluminum, Rusal introduced Allow in November 2017—a low-carbon aluminum brand representing about 80% of the company’s total production.

Founder Oleg Deripaska has advocated implementing significant carbon taxes to encourage the sector’s transition away from coal-based energy and to reduce greenhouse gas emissions.

In September 2021, Rusal collaborated with the UK’s Budweiser Brewing Group to supply five million ultra-low carbon beer cans manufactured at its Krasnoyarsk facility in Siberia, which utilizes hydropower for energy.

2011 Japan earthquake

Following the devastating Tōhoku earthquake and tsunami in 2011, UC Rusal contributed $600,000 to organizations supporting Japanese children and cultural heritage preservation. Donations benefited the Ashinaga Foundation’s educational programs, the Yul Foundation’s rehabilitation efforts for students, and the Ishinomori Mangattan Museum’s cultural restoration projects in Miyagi Prefecture.

2012 Cholera outbreak in Sierra Leone

In response to a cholera epidemic in Sierra Leone during 2012, Rusal provided 25 tonnes of medical supplies to aid containment efforts, reflecting its dedication to corporate social responsibility initiatives.

2013 Nigeria fresh water projects

In partnership with Alscon in 2013, Rusal helped establish fourteen fresh water facilities across Nigeria’s Ikot Abasi region, delivering clean drinking water to more than 10,000 residents.

2014 Ebola epidemic

Amid the 2014 Ebola crisis in West Africa, UC Rusal contributed to global humanitarian initiatives and allocated $10 million in 2015 to establish the "Centre for Epidemic and Microbiological Research and Treatment" located in Guinea. The corporation supplied pharmaceutical products and hygiene supplies to Guinea's Ministry of Health and played a key role in setting up a mobile hospital with a capacity of 200 beds. This centre facilitated clinical testing of a Russian-developed Ebola vaccine, which was officially introduced in Kindia in August 2017.

Carbon emissions

For the fiscal year ending December 31, 2020, Rusal disclosed total greenhouse gas emissions (both direct and indirect) amounting to 28,604 kilotonnes of CO2 equivalent, marking a 1.7% rise compared to the previous year. This rate of increase has decelerated relative to earlier periods, with a compound annual growth rate of +3.4% recorded since Q4 2018.

Annual total CO2e emissions for Rusal (kilotonnes)
December 2018 December 2019 December 2020
25,860 28,114 28,604

See also

External links

  1. ↑ Compliance deadline set for October 2018.
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