Aluminium giant straddles the world

LONDON --RUSAL, SUAL Group and Glencore have welcomed the decision by the European Commission to grant clearance for the transaction to create United Company RUSAL. The enlarged company, which will consolidate RUSAL, SUAL and alumina assets of Glencore will be the world's biggest aluminium and alumina producer. Notification of the approval was announced by the European Commission on February 1. The only seeming major hurdle now to be overcome would be the proposed movement of domicile from Russia.

Under the terms of the merger agreement, RUSAL's shareholder will own 66% of the new company, with SUAL's shareholders owning 22% and Glencore 12%. The combined company owns bauxite mining, alumina refineries, aluminium smelting and foil production facilities and becomes the world's largest aluminium and alumina producer, employing more than 110,000 people in 17 countries on five continents. It will account for some 12.5% of global aluminium output and 16% of global alumina production. Annually it will produce about 4 Mt of aluminium and 11 Mt of alumina.

Commenting on the EC's approval of the merger agreement, RUSAL Chief Executive, Alexander Bulygin said: The EC's approval of our merger agreement is a major milestone towards completing the transaction. The transaction has a compelling industrial logic and offers significant synergies for further growth.?

The unified company will include RUSAL's following assets: Bratsk, Krasnoyarsk, Novokuznetsk, Sayanogorsk Aluminium Smelters, Achinsk Alumina Plant, Nikolaev and Boksitogorsk Alumina Refineries, Friguia Alumina Plant (Guinea), Compagnie des Bauxites de Kindia (Guinea), Bauxite Co of Guyana, a stake in the Queensland Alumina Refinery (Australia), Eurallumina (Italy) as well as ARMENAL, SAYANAL and a cathode plant in China.

SUAL will contribute Irkutsk, Urals, Kandalaksha, Bogoslovsk, Nadvoitsy, Volgograd and Volkhov Aluminium Smelters, Zaporozhye Aluminium Combine, Pikalevo Alumina Refinery, SUBR, Urals Foil, as well as Silicon, SUAL-Silicon-Ural and SUAL-PM. Glencore will contribute the following alumina refineries: Aughinish in Ireland, Windalco and Alpart in Jamaica and Eurallumina in Italy, along with the Kubikenborg Aluminium Smelter in Sweden.

RUSAL is the world's third largest primary aluminium producer, providing primary aluminium and value-added casthouse products to customers in 50 countries. Headquartered in Moscow, with operations in nine regions of Russia and 13 countries globally, RUSAL now accounts for 75% of aluminium production in Russia and 10% internationally. RUSAL has 47,000 employees and was established in March 2000 through a merger of several largest aluminium smelters and alumina refineries in the CIS.

SUAL Group is a vertically integrated company, one of the world's 10 largest aluminium producers. It combines enterprises that extract bauxite, refine alumina and produce primary aluminium, silicon, aluminium semi-finished and finished products. SUAL's enterprises form a full production cycle, from bauxite extraction (over 5.4 Mt/y), alumina refining (about 2.3 Mt/y) and primary aluminium production (more than 1 Mt/y) to the manufacture of aluminium semi-finished and finished products.

Glencore has global activities in the smelting, refining, mining, processing, purchasing, selling and marketing of metals and minerals, energy products and agricultural products.