UC RUSAL, World's Largest Producer of Aluminium and Alumina, Comments on the Chinese Market

Below is the commentary today by Artem Volynets, Director of Corporate Strategy of UC RUSAL, the world's largest producer of aluminium and alumina, on the Chinese market: "UC RUSAL is actually an Asian company. 80% of UC RUSAL's aluminium production facilities are located in Asia, the key smelters are just 500 km from the Chinese border, much closer to Beijing that to Moscow or London. The transportation costs and delivery timeline of Siberia-produced aluminium to China are minimal. Delivery cost from Vanino to Shanghai is only USD$15/ tonne. It is common knowledge that China is short on energy, it has to buy oil. As aluminium production is a highly energy consuming industry, it is a waste of energy for a country that imports energy to produce aluminium. Such countries are moving into higher value added products and turn into aluminium importers. Japan and Korea have already done that and focused on downstream. That is the path that China is now taking. UC RUSAL is a natural partner for China. We do not plan to compete with the traders. We are planning to have seven to eight such large customers like China North Industries Corporation (NORINCO) that are looking for a long-term reliable supplier of high quality aluminium. NORINCO contract is a breakthrough trend setting development for the Chinese market. It represents a change in their business philosophy. Before this Chinese market was balanced, now it is shifting to import. It is noteworthy that global consumption of aluminium has mostly shifting to Asia. UC RUSAL is the only company that could satisfy the needs of the rapidly growing Chinese economy. We are the only aluminium producer that could quickly launch a considerable amount of new capacities that will be again favorably located in proximity to China. Other companies either could not expand so quickly or are limited by their own production circle. As for the joint projects, we will secure contracts with large consumers like NORINCO or provide our potential partners access to the raw materials resource to jointly develop them." About UC RUSAL United Company RUSAL (www.rusal.com) is the global leader in the aluminium industry, accounting for approximately 11% and 13% of global production of aluminium and alumina respectively. UC RUSAL employs more than 75,000 people in 19 countries, across 5 continents. UC RUSAL markets and sells its products primarily in the European, Japanese, Korean, South East Asian and North American markets. Source: UC RUSAL