NEW YORK United Co. Rusal
has no intention of selling its stake in MMC Norilsk Nickel
despite reporting a $1.4-billion write-down on its share of the
company in its 2011 financial results, Rusal deputy chief
executive officer Oleg Mukhamedshin told AMM.
"Our strategy hasnt
changed. We plan to hold it," Mukhamedshin said.
The comments come less than two
weeks after Rusal chairman Viktor Vekselberg suddenly resigned
in a move some attributed to disagreements over whether to sell
the companys 25-percent stake in Norlisk Nickel
(AMM, March 13). Vekselberg supported a sale of
Norlisk Nickel, but chief executive officer Oleg Deripaska has
refused, maintaining it is a long-term investment.
The public fallout between the
former chairman and the company, coupled with poor
earningsRusal reported a 91.7-percent drop in net income
to $237 million in 2011 from $2.87 billion in
2010hasnt changed Rusals long-term plans,
according to Mukhamedshin.
"Were on the road meeting
with investors explaining our results," Mukhamedshin, who spent
this past week traveling in the United States to meet with
investors, told AMM in a telephone interview from
Boston. "We have two teams traveling all over the world meeting
with key investors, (something) we do every quarter after
He declined to offer details of
the conversations, but Rusals planned direction under its
new chairman, Barry Cheung, is thought to be at the forefront
of the discussions. Cheung, a non-executive director of the
board since 2009, began his new role March 16.
"(Barrys) key goal is to
improve corporate governance on the board level," Mukhamedshin
said. "Hes also going to participate in our investor
relations and improve the overall relationship between the
board and the public."
Management shake-up aside,
Mukhamedshin said Rusal remains fairly bullish for 2012,
forecasting global growth of 7 percent in primary aluminum
consumption and anticipating all regions outside of Europe will
experience a pickup this year.
Rusal predicts aluminum
consumption in China will increase by 11 percent this year;
India by 10 percent; Russia, 6 percent; Japan, 5 percent; North
America, 5 percent; and Latin America, 5 percent. Meanwhile,
European consumption will be flat this year, the Russian
Despite a reasonably optimistic
outlook, the Russian producer has publicly stated that it is
contemplating cutting its total aluminum production by 6
percent in the next 18 months, although this number isnt
set in stone, Mukhamedshin said.
"We should decide by the end of
the year," he said, adding that if the company goes ahead with
possible capacity curtailments it will likely occur at its
high-cost smelters in Europe.
Meanwhile, the company continues
to invest in the modernization of 10 smelters to produce
value-added aluminum products, and in the next five years aims
to increase output to 2.4 million tonnes from 1.5 million
tonnes (AMM, Jan. 19, 2011).
Rusal will spend $55 million to
modernize five of its smelters in Western RussiaVolkhov,
Volgograd, Kandalaksha, Nadvoitsy and the Urals. Rusal
completed the Volkhov modernization in December, which now
produces A356.2 alloys, mainly used in wheel disks
(AMM, Feb. 20).
The aluminum producer will also
increase value-added product output at Siberian smelters in
Krasnoyarsk, Bratsk, Sayanogorsk, Irkutsk and Novokuznetsk, he