RUSAL in 1.68 mln t China aluminium supply deal

* UC RUSAL to supply 1.68 mln t aluminium 2010-2016 * NORINCO source says will sell 20,000 t a month to spot mkt * Debt-laden RUSAL, keen to finalise IPO, could get lump sum By Polly Yam and Toni Vorobyova HONG KONG, Nov 2 (Reuters) - The world's top aluminium producer, Russia's UC RUSAL, has struck a contract to sell 1.68 million tonnes to Chinese state defence firm NORINCO in 2010-2016, the Russian firm said on Monday. A source at the Chinese firm, officially known as China North Industries Corporation (NORINCO), said the deal meant RUSAL would supply 20,000 tonnes of aluminium a month to Shanghai for sale on the spot market. He said pricing had yet to be finalised, although RUSAL denied this. "RUSAL and Norinco have agreed the price and all other terms and conditions of the aluminium delivery," the Russian firm said in a statement emailed to Reuters. RUSAL is urgently trying to reach agreement with foreign creditors on $7.3 billion of debt by mid-November to pave the way for a Hong Kong share listing that would help pay off debt, senior bankers said last week. The NORINCO source said the firms were still in talks on prices. "We have signed the contract confirming the quantity. We are still talking on details and prices," said the source, who is familiar with the deal. "The payment may involve trade finance." He added that trade finance could include a lump sum payment for the whole 1.68 million tonnes of primary aluminium in advance. An advance lump sum payment for the entire volume, based on today's aluminium prices at $1,911 , would equal $3.21 billion, a Reuters calculation showed. RUSAL's main owner is Oleg Deripaska, once Russia's richest man and now its most indebted tycoon. "This agreement represents a significant step towards achieving our strategic objective of increasing exposure to the Chinese market," RUSAL's corporate strategy director, Artem Volynets, said in a statement. The company expects to double China sales from 5 percent of its revenue in 2009 to 10 percent by 2015. The deal was suggested by the Russian government during Russian Prime Minister Vladimir's visit to Beijing last month. "The deal is not only a supply contract but also a government-government one," he said. (Reporting by Polly Yam; Editing by Jonathan Hopfner and Clarence Fernandez)