Rusal plans demerger of its higher carbon assets

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Rusal is pursuing a demerger of its higher carbon assets to unlock value through the creation of two businesses with separate strategies.

The proposed demerger of its high-carbon assets 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. The board of directors has given approval to a proposal from the management, which is in line with the company’s ambitious environmental goals and strategy to achieve carbon neutrality by 2050.

Demerger of high-carbon assets supports Rusal’s sustainability goals

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 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 and technological focus.

New company characterized by up-to-date smelting technology

Following the proposed demerger, the newly created company would concentrate on promising growing markets and deliver a long-term modernization 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 modernization 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.

Demerger “the next chapter in our journey”

Bernard Zonneveld, chairman of Rusal’s board of directors, said: “As the sustainability movement gathers pace around the world, the proposed demerger 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 modernization 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.”

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