History

Civitas successit barbarum
Civilization succeeds barbarism

In the early 90s the Russian aluminium industry was in a tight spot. Hyperinflation along with the elimination of the budget financing halted the smelters’ operations, while the collapse of the Soviet was forced to cut aluminium consumption by almost nine times. The only way for the Russian aluminium industry to tackle the crisis was to shift its focus towards the export markets.

British Trans World Group, which in the first half of the 90s gained control over the major part of the aluminium operations in Russia, successfully campaigned to introduce an infamous tolling system in the country. The scheme involved a tax-free regime for both raw materials import and aluminium export. The arrangement fuelled the owners’ profits, yet limited the operations expansion.

1993 was marked with the start of the Russian aluminium industry privatization. At the same time the industry became a target for organized crime groups, which were attracted by the lucrative profits, driven by the tolling system. At first, the criminals established control over the seaports, forcing companies to pay «duties» for export deliveries. Apparently, this wasn’t enough as the criminals also began stealing aluminium from the smelters.

It wasn’t too long before the crime groups took an interest in the plants’ shareholder capital. In their efforts to grasp control over the industry, the criminals were blackmailing, intimidating and murdering those who were unwilling to cooperate with them.

Yet, in spite of the chaos that dominated the country at the time, in the mid-1990s the industry started to emerge back to life. Oleg Deripaska, then the owner of the Sayanogorsk aluminium smelter, soon Aluminium group, owned by Mr Deripaska, grew into a large vertically integrated company with substantial production capacity and its own sales network.

In the late 90s the crime boom in Russia started to fade away due to the strong concentrated efforts of the Russian government. In 2000 the tolling system was revoked and replaced by the export duties civilized path and its disparate assets started to get consolidated.

Civitas successit barbarum
Civitas successit barbarum

In the early 90s the Russian aluminium industry was in a tight spot. Hyperinflation along with the elimination of the budget financing halted the smelters’ operations, while the collapse of the Soviet was forced to cut aluminium consumption by almost nine times. The only way for the Russian aluminium industry to tackle the crisis was to shift its focus towards the export markets.

British Trans World Group, which in the first half of the 90s gained control over the major part of the aluminium operations in Russia, successfully campaigned to introduce an infamous tolling system in the country. The scheme involved a tax-free regime for both raw materials import and aluminium export. The arrangement fuelled the owners’ profits, yet limited the operations expansion.

1993 was marked with the start of the Russian aluminium industry privatization. At the same time the industry became a target for organized crime groups, which were attracted by the lucrative profits, driven by the tolling system. At first, the criminals established control over the seaports, forcing companies to pay «duties» for export deliveries. Apparently, this wasn’t enough as the criminals also began stealing aluminium from the smelters.

It wasn’t too long before the crime groups took an interest in the plants’ shareholder capital. In their efforts to grasp control over the industry, the criminals were blackmailing, intimidating and murdering those who were unwilling to cooperate with them.

Yet, in spite of the chaos that dominated the country at the time, in the mid-1990s the industry started to emerge back to life. Oleg Deripaska, then the owner of the Sayanogorsk aluminium smelter, soon Aluminium group, owned by Mr Deripaska, grew into a large vertically integrated company with substantial production capacity and its own sales network.

In the late 90s the crime boom in Russia started to fade away due to the strong concentrated efforts of the Russian government. In 2000 the tolling system was revoked and replaced by the export duties civilized path and its disparate assets started to get consolidated.

Ab Initio
From the beginning

On the verge of a new millennium, the assets of Sibirsky Aluminium, owned by Oleg Deripaska, and Millhouse Capital, controlled by Roman Abramovich, were combined to form a new company RUSAL.

Semper in motu
Always in motion

By 2002 RUSAL’s assets already included the foil mill ARMENAL in Armenia and the Belaya Kalitva rolling mill. In 2002 the company also took over the management of the Compagnie des Bauxites de Kindia (CBK), a mining complex in Guinea, developing one of the world’s largest bauxite

In 2002 RUSAL took over the management of another Guinean company – the Friguia Alumina Refinery.

RUSAL’s production capacity was further expanded through the acquisition of the controlling stake in the Novokuznetsk aluminium smelter.

In 2002 RUSAL set the foundation for the development of its R&D competencies through creating an Engineering and Technology Centre to oversee RUSAL’s scientific and design projects.

Mens Agitat Molem
Mind moves matter

RUSAL’s Engineering and Technology Centre developed a new cutting-edge smelting technology, which allowed diminishing energy consumption and boosting reduction cells’ lifetime. In 2003, new cells, operating at 320 kA, were commissioned at Sayanogorsk smelter.

The Russian national aluminium-magnesium institute (VAMI) became a part of RUSAL and took over the design works for the company’s greenfield projects.

Roman Abramovich sold his 25% interest in RUSAL to Oleg Deripaska increasing Basic Element stake in RUSAL to 75%.

Terra Nova
New land

RUSAL’s operations spread across the Atlantic – in 2004 the company received a license to develop bauxite deposits in Guyana (Latin America). Under the agreement between RUSAL and the government of Guyana a new company – Bauxite Company of Guyana Inc. – was founded.

Basic Element became the sole owner of RUSAL.

Crescit Eundo
It grows as it goes

In 2005, RUSAL’s global expansion was gathering momentum. The company acquired 20% of the Queensland Alumina Limited (QAL) from Kaizer Aluminium. QAL is the second largest alumina producer in the world.

In 2005 RUSAL's Engineering and Technology Centre completed the development of a new reduction cell, operating at 400kA. In 2005 the RA-300 cells were put into operation at Sayanogorsk Aluminium smelter.

RUSAL completed the deal to sell two rolling mills (Samara and Belaya Kalitva facilities) to Alcoa

Non progredi est regredi
Not to go forward is to go backward

2006 represented a landmark year for RUSAL in terms of developing raw materials and production base. In 2006 RUSAL acquired 56.2% of Eurallumina refinery in Sardinia, completed the deal to purchase a cathode plant in the Chinese Shanxi Province, became the owner of a controlling stake in the Aroiama Mining Company (a bauxite mining complex in Guyana) and acquired the Boksitogorsk smelter in Russia.

In December 2006 RUSAL commissioned the Khakas smelter – the first aluminium plant built in Russia after a 20-year break

In the same year RUSAL signed an agreement with the Russia's largest power generating company HydroOGK (in 2008 renamed RusHydro) to construct an energy and metals complex in Krasnoyarsk region.

Viribus unitis
With united powers

ВIn March 2007 RUSAL completed a merger with Russia’s SUAL and the alumina assets of Swiss Glencore. United Company RUSAL that was formed through this merger becoming the world’s largest aluminium producer.

2007 gave a start to two large-scale projects: in May RUSAL and HydroOGK commenced the construction of Boguchansky smelter and in June RUSAL started the construction of Taishet smelter in Irkutsk region.

October RUSAL’s Khakas smelter reached full capacity well ahead of schedule.

Malum discordiae
The apple of discord

In April 2008 RUSAL bought 25% plus two shares of Norilsk Nickel, the world’s largest producer of nickel and palladium and one of the largest producers of platinum and copper.

RUSAL and Kazakhstan’s National welfare fund “Samruk-Kazyna” created a joint venture to develop the Ekibastuz coal basin in Central Asia.

RUSAL continued to develop its raw materials and production base: in February the company launched ALSCON smelter in Nigeria and commissioned two new potrooms in the Irkutsk smelter. In March RUSAL acquired Taigu Cathode plant in China.

Tempora Mutantur
Times change

The year of the global recession was one of the toughest on record in the history of RUSAL. The demand and price for aluminium plunged to historic lows, adversely affecting the company’s financial performance and creating tension in relationships with lenders.

In January 2009 RUSAL’s board appointed Mr Oleg Deripaska as the company’s Chief Executive Officer. Mr Deripaska replaced Alexander Bulygin who had been the company’s head for five years.

Throughout the year RUSAL was taking bold actions to tackle the effects of the recession. The measures, aimed at streamlining production and cutting costs, allowed the company to weather the crisis with minimal losses while setting up the foundation for further progress and diversification.

Thanks to the support of the Russian and global financial communities, RUSAL’s debts were successfully restructured in December 2009.

In spite of the crisis-induced challenges, in July 2009 RUSAL completed the environmental modernisation of the Krasnoyarsk smelter. The project’s final stage was the launch of the new dry gas scrubbing system.

Ex Oriente Lux
Sun rises from the East

At the beginning of a new decade RUSAL entered a new phase of development, having listed its shares on the Hong Kong Stock Exchange and the NYSE Euronext in Paris. In December 2010 RUSAL listed its RDRs (Russian depositary receipts) on Russia’s MICEX and RTS stock exchanges.

In April RUSAL commissioned the 5th potline in the Irkutsk aluminium smelter. The new potline is equipped with the new generation prebaked anodes reduction cells, operating at 300 kA. The introduction of the 5th potline wrapped up the extensive modernization of the Irkutsk aluminium smelter that started in 2005. The first two potrooms of the new potline were put in place in 2008.

In June 2010 RUSAL launched a joint education and research project with the Hong Kong University of Science and Technology. The partners will conduct joint scientific research and implement award and scholarship programme to help students and professors from Russian as well as Hong Kong colleges to share their knowledge and expertise.

Tempora mutantur et nos mutantur in illis
Times change, and we change with them

The global economic downturn has reshaped the world’s industrial landscape, shifted priorities and set the new trends for development. Upon a thorough analysis of the situation in the global market, RUSAL has developed a new 10-year strategy. Its implementation will enable the company to reinforce its leadership in the global aluminium industry and further its progress amid the changed market environment.

In January 2011 RUSAL resumed the construction of the Boguchansky aluminium smelter.

Tempora mutantur et nos mutantur in illis
Times change, and we change with them

The global economic downturn has reshaped the world’s industrial landscape, shifted priorities and set the new trends for development. Upon a thorough analysis of the situation in the global market, RUSAL has developed a new 10-year strategy. Its implementation will enable the company to reinforce its leadership in the global aluminium industry and further its progress amid the changed market environment.

In January 2011 RUSAL resumed the construction of the Boguchansky aluminium smelter.

Aluminium: Thirteenth Element