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Rusal, Chalco sign pact to cut costs, expand markets

Keywords: Tags  Rusal, Chalco, aluminum, Russia, China, cooperation, expansion, costs Xi Jinping

SINGAPORE — Russia’s United Co. Rusal and China’s Aluminium Corp. of China Ltd. (Chalco) have signed a memorandum of understanding to cooperate on research, jointly develop bauxite resources, and invest in integrated hydropowered aluminum production, Rusal announced March 25.

The memorandum was signed in the presence of Chinese president Xi Jinping and Russian president Vladimir Putin in Moscow March 22.

“This partnership between the two major global players in the aluminum sector is a significant step to address the current ... overproduction in the aluminum market,” Rusal chief executive officer Oleg Deripaska said in a statement

“Through close cooperation, the companies will look for new technological responses and replace outdated, high-cost production facilities with new, advanced, energy-efficient production capacity in eastern Siberia, so as to promote sustainable development of the aluminum industry,” Deripaska added.

The Moscow-based producer has limited its sales in Europe in order to focus on Asian markets.

In December, Rusal signed a similar memorandum of understanding with Shandong, China-based Shandong Xinfa Group. That agreement could lead to joint work on alumina and bauxite assets, (, Dec. 6).

Rusal has been marketing Russia as an alternative and viable destination for new China-owned smelters since last year amid an industry restructuring due to low prices and inflated production costs.

“The signing of the memorandum of understanding is of great significance in the context of the severe challenges faced by the global aluminum industry,” Xiong Weiping, chairman of Beijing-based Chalco and president of its holding company, said.

“Chalco has a strong edge in research and development, engineering and design, construction, operation management, and in other areas,” Xiong added.

“Rusal’s clear advantages in aluminum industry technologies and hydropower resources are evident,” he said. “Both parties will work closely together on various levels in the aluminum sector by complementing each other’s advantages, thereby contributing to the sound development of the global aluminum industry.”

Rusal recently announced plans to cut 300,000 tonnes per year of aluminum capacity in 2013 following a slump in earnings in 2012 (, March 4). 

A version of this article was first published by AMM sister publication Metal Bulletin.

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