19.05.2021 - UC RUSAL (original material)

UC RUSAL (Hong Kong Stock Exchange code 486, Moscow Stock Exchange code RUAL), a major global aluminium producer, has announced plans to spin off high carbon footprint assets into a separate Company. The two new Companies that UC RUSAL will split up into will then each be able to focus on its own development strategy aimed at tapping its full potential. The UC RUSAL Board of Directors has approved the management proposal to split the Company in two, as it matches the Company's ESG strategy and its obligation to achieve zero net CO2 emissions by 2050.

Each of the two new Companies will focus on implementing its own development strategy in the interests of the shareholders. Thus, UC RUSAL will concentrate on strengthening its positions as the largest low carbon footprint aluminium producer, while the new Company will focus on developing domestic sales that have significant growth potential.

For UC RUSAL, this reorganisation is yet another step towards strengthening its positions in the production of low carbon footprint aluminium, including aluminium it produces under the ALLOW brand. A significant proportion of UC RUSAL's production capacity utilises renewable hydroelectric power, which allows the Company to offer the market and its consumers products with the lowest carbon footprint in the world. In addition, the Company will continue to work on the innovative inert anode process, which can bring the carbon footprint of aluminium production down to zero.

A logical next step in this direction is the management's proposal that the Company's name should be changed from UC RUSAL to AL+. UC RUSAL's Board of Directors has included the question of changing the name on the agenda of the general annual meeting on 24 June 2021. The new name AL+ embodies the key values and priorities of environmentally friendly progress in the Company's strategy. The new brand reflects the global leadership of the Company as the largest producer of value-added products from aluminium with a low carbon footprint, a reliable partner that prioritises development, innovations, global reach and modern technologies.

The new Company will be able to focus on prospective emerging markets and on implementing the major environmental upgrade programme at its production facilities, which was announced back in April. Its largest assets will comprise Russian alumina assets (the Achinsk, Bogoslovsk, Urals and Pikalevo refineries) and aluminium smelters (the Bratsk, Irkutsk, Novokuznetsk, Volgograd and Kandalaksha smelters). A large portion of the old reduction areas will be rebuilt and upgraded to use the latest iteration of the baked anode process.

The proposed transformation implies that consultations are to be held with all stakeholders, and may require approval by regulators, the creditors, shareholders and other parties.

'More and more people around the world are adopting the sustainable development values. So, today we're announcing the next important step in this direction, which meets the interests of both Companies. AL+ will focus on achieving the goals of the Net Zero programme which we announced earlier, and will be promoting low carbon footprint products under the ALLOW brand, while the new Company will focus on a long-term production capacity modernisation programme. The proposed split will allow both Companies to realise their full potential. I am confident that putting assets with different carbon footprints in two different Companies will help us boost capitalisation and take advantage of new development opportunities', noted Bernard Zonneveld, the chair of the UC RUSAL Board of Directors.

'Today we're turning a new page in the history of our Company, which in the past 20 years has evolved from a primary aluminium producer to the preferred supplier of high-quality value-added products for major global brands. This transformation reflects our commitment to the key values of the Company and the emphasis we put on environmentally friendly sustainable progress, which we've always been guided by in our strategy as a reliable and transparent low carbon footprint aluminium producer. Sustainable development is the only possible foundation for comprehensive industrial development the world over, and we continue to implement our ambitious sustainable development strategy', said UC RUSAL CEO Evgeny Nikitin.

Supplementary information
The proposed allocation of key assets between the two Companies
RUSAL (AL+):
Aluminium smelters: Krasnoyarsk, Sayanogorsk, Khakassia, Taishet, Boguchany, KUBAL.
Alumina refineries: Nikolaev, Aughinish, EurAllumina, QAL, Friguia, WINDALCO.
Mining assets: Kindia, Dian Dian, BCGI.
Downstream division companies (foil production, automotive wheels and powder production).

The new Company:
Aluminium smelters: Bratsk, Irkutsk, Novokuznetsk, Kandalaksha.
Alumina refineries: Achinsk, Bogoslovsk, Uralsk, Pikalevo.
Mining assets: North-Ural Bauxite Mine, Boksit Timana.