30 June 2003: SUAL today announced that it has mandated both International Finance Corporation (IFC), a member of the World Bank Group and the European Bank for Reconstruction and Development (EBRD) to negotiate a financing for Phase I of its Komi Aluminium project.

Phase I of this project involves the expansion of SUAL’s bauxite operations in the Komi Republic, in the Russian Federation. Phase I funding of up to USD 90 million will be project financed and will be in the form of debt. In addition, the EBRD and IFC will support the bankable feasibility study for Phases II and III of this project and both may consider investing in the project company.

The construction of an alumina refinery (Phase II) and the construction of an aluminium smelter (Phase III) is expected to go forward after the conclusion of a bankable feasibility study. The IFC has also proposed to help SUAL develop opportunities for local and regional businesses

Vladimir Kremer, Komi Aluminium’s Director General and member of SUAL’s Board of Directors stated: “The involvement of both the EBRD and IFC at this stage of Komi Aluminium’s development is very positive. The EBRD’s local market expertise and the IFC’s global reach and mining sector knowledge, as well as their combined financial strength, will help SUAL to realise its vision of an integrated bauxite/alumina/aluminium complex in the Komi Republic. Further, their involvement will also help in the development of the Republic and improve its investment and business climate”.

Notes to Editors

Komi Aluminium is the SUAL Group’s project to develop an integrated bauxite/alumina/aluminium complex. This complex is expected to achieve annual production of up to 6.5 million tonnes of bauxite, 1.4 million tonnes of alumina and 300—500,000 tonnes of primary aluminium. The Komi bauxite deposit (Timan Bauxite) is already operational and produces about 1.0 million tonnes annually. In the third quarter of 2002, SUAL completed Russia’s first private railroad that linked the bauxite deposit to the national railroad system. SUAL has invested over USD100 million in the project so far.