19.05.2021

RUSAL plans for fundamental transformation

Moscow, May 19, 2021 - RUSAL (SEHK: 486; Moscow Exchange: RUAL), a leading aluminium producer, announces that it is pursuing a demerger of its higher carbon assets to unlock value through the creation of two businesses with separate strategies. The Board of Directors has given approval to a proposal from management, which is in line with the Company’s ambitious environmental goals and strategy to achieve carbon neutrality by 2050.

The proposed transformation would result in two companies focusing on the execution of their own independent strategies to drive value for stakeholders: RUSAL would focus on reinforcing its position as a leading producer of low-carbon aluminium and the new company would concentrate on the development of the domestic market and its growth potential.

With this transformation plan, RUSAL has taken another major step towards reaffirming its intent on remaining the largest producer of low-carbon aluminium with its market-leading brand ALLOW. Thanks to its extensive usage of clean energy sources such as hydropower, the Company is committed to providing the market with the lowest carbon footprint aluminium possible. RUSAL will be better positioned to reach its full potential as a sustainable business, developing ground-breaking inert anode technology which delivers the promise of carbon free aluminium production.

As a logical continuation of this transformation, RUSAL’s management has proposed to change the name of the Company to “AL+”. The Board of Directors included this item as part of the Company’s annual shareholders meeting agenda, scheduled for 24 June 2021. The new AL+ brand represents the Company’s core values and environmental stewardship progress. It reflects the Company’s position as one of the world’s largest manufacturers of sustainable, value-added, low-carbon aluminium, highlighting its dynamic, innovative, international and technological focus.

Following the proposed demerger, the newly created company would concentrate on promising growing markets and deliver a long-term modernisation programme, as announced in April. The new company is expected to comprise alumina refineries located in Russia (Achinsk, Bogoslovsk, Urals and Pikalevo) and smelters in Bratsk, Irkutsk, Novokuznetsk, Volgograd and Kandalaksha. As part of the aforementioned long-term environmental modernisation programme, the new company would replace most of its presently installed electrolysis lines with new ones using the most up-to-date pre-baked smelting technology.

The proposed transformation requires consultation with the stakeholders of the Company and may be subject to regulatory, lender, shareholder and other third-party approvals.
Bernard Zonneveld, Chairman of the Board of Directors of RUSAL, said: “As the sustainability movement gathers pace around the world, the proposed demerger we are announcing today would represent the next chapter in our journey and is firmly in the interests of both companies; enabling AL+ to focus on its Net Zero priorities, further promoting its industry leading low carbon brand ALLOW, while the newly created company would concentrate on delivering a long term modernisation programme. The proposed transformation would allow both companies to unlock their full potential. I believe that the proposed separation of assets with different carbon footprint will open the door for future shareholder value creation and will accelerate growth opportunities”.

Evgenii Nikitin, General Director of RUSAL, said: “Today marks a bold new era for our Company, which during its last 20 years, has come a long way from a primary aluminium producer to a preferred supplier of high-quality, sustainable VAP products for leading global brands. This transformation represents our commitment to our core values and environmental stewardship progress as we continue along our journey as a clean, low carbon, transparent aluminium and VAPs producer. Sustainable growth is the only possible basis for the development of industries around the world and we will continue the implementation of our ambitious ESG strategy.”

Additional information
After the demerger, allocation of key assets will be as follows.
RUSAL (AL+)
Aluminium smelters – Krasnoyarsk, Sayanogorsk, Taishet, Khakas, Boguchansky, KUBAL.
Alumina refineries – Nikolaev, Aughinish, EurAllumina, QAL, Friguia, WINDALCO.
Mining assets – Kindia, Dian Dian, BCGI.
Enterprises of the Downstream division (production of aluminium foil, car wheels, powders etc.)
The new company
Aluminium smelters – Bratsk, Irkutsk, Novokuznetsk, Volgograd and Kandalaksha.
Alumina refineries – Achinsk, Bogoslovsk, Urals and Pikalevo.
Mining assets – North Urals Bauxite Mine, Timan Bauxite.
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