RUSAL statement regarding Government Commission decision on Bogoslovsk aluminium smelter

RUSAL considers it necessary to make the following statement.

RUSAL is satisfied with the results of the Government Commission session dedicated to analysis of the situation at the Bogoslovsk aluminium smelter and development prospects of the whole Urals aluminium production cluster. The Company has always emphasized that the key condition for stable operations of aluminium smelters is energy supply tariff enabling competitive production.

Joint consultations held during the Commission session joined by the representatives from the Sverdlovsk Regional Government, IES Holding, Federal Grid Company, IDGC Holding, Ministry of Industry and Trade and Ministry of Energy, resulted in the signing of an agreement, aimed at the sustainable development of the Urals aluminium production cluster. In particular, starting on 1 January 2012, the Bogoslovsk aluminium smelter will be able to enter into a direct energy supply contract with Federal Grid Company. The agreement also states that RUSAL will purchase the Bogoslovsk Power Plant from IES Holding including rights on the 230MWt Novobogoslovsk Power Plant capacity allocation contracts project, allowing the Company to create a leading energy and metals and mining complex in Urals Region.

In its turn, the Company agreed to focus on bringing the smelter to break-even and over the next five years, will upgrade the Bogoslovsk aluminium smelter’s production facilities, providing production rates no lower than in 2011 levels whilst increasing the smelter’s energy efficiency, bringing it in-line with modern technology..

RUSAL has always acknowledged the energy tariff problems and continues to remain confident that this will not result in staff redundancies or the closure of the Bogoslovsk Aluminium smelter. The smelter continues to be operational.