Rusal cutes aluminium output and cost

Today UC Rusal announced interim results of the production volume reduction programme at its least-efficient smelters.

As of 17th October, aluminium production has been mothballed at the Volgograd (VgAZ), Urals (UAZ), and Volkhov (VAZ) aluminium smelters, as well as at the first phase of Novokuznetsk (NkAZ) smelter and at ALSCON smelter in Nigeria. In addition, aluminium production has been mothballed at the Bogoslovsk (BAZ) smelter potrooms 2, 3, 4, 5 (potroom 1 was shut down in 2011) and at the Nadvoitsy (NAZ) smelter potrooms 1, 2 (potroom 3 was shut down in 2012).

Output decrease in 2013 at the above-mentioned facilities will amount to 247,009 tonnes, and will result in an output decrease of 516,062 tonnes in 2014.

Thanks to various measures taken by RUSAL, such as amperage reduction, production volume at the Sayanogorsk (SAZ), Irkutsk (IrkAZ), Novokuznetsk (second phase) and Khakass (KhaZ) aluminium smelters has decreased. Output reduction in 2013 at these smelters will amount to 77,724 tonnes with an expected effect of 131,442 tonnes in 2014.

As a result of the output reduction programme, Rusal has already cut aluminium production by 324,733 tonnes, or 8% of 2012 production volume, with an effect of 647,504 tonnes, or 15% of 2012 production volume, in 2014. These measures have allowed the Company to realize savings of USD40 per tonne in cash cost of aluminium.

«Rusal continues to react to the current market conditions and may consider further actions to improve its cost position in the industry» commented Vladislav Soloviev, Rusal’s First Deputy CEO.

Also, due to the prevailing market conditions, investors of the BEMO project have taken the decision to delay the start of the commissioning of the Boguchansky smelter until mid-2014.