MOSCOW, 24 April, 2003 - RUSAL, the world's second largest aluminium company, today reported   production results for the first quarter ended March 31st, 2003. The group registered increased output across all major product types.

Smelting production across the group increased by almost 3 %. This was due primarily to the addition of new electrolysis cells at Sayanogorsk Aluminium Smelter, as well as the rise of electrical strength at Sayanogorsk (by 11.5 kA to 220.45 kA) and Krasnoyarsk (by 2.23 kA to 157.78 kA). Sayanogorsk Aluminium Smelter produced 109 761 tons of primary aluminium and alloys, showing 10.5% year-on-year growth. Production of alloys at Sayanogorsk increased significantly. Alloys now make up 34.3% of the smelter’s product mix as compared with 17% in the first quarter of 2002. Modernization programmes at Krasnoyarsk, Bratsk and Novokuznetsk helped to raise the smelters’ output by 2.2%, 0.5% and 2% respectively.

RUSAL’s efforts to expand its raw material base resulted in substantial increases in alumina output. Friguia Alumina Refinery, which was integrated into the group last year, added 171 247 tons of alumina as well as 551 447 tons of bauxite to the first quarter’s output. Achinsk and Nikolayev Alumina Refineries increased their output by 1.5% and 6.4% respectively.

The group’s downstream facilities also registered significant growth in output due to investments in the plants’ modernization last year. Modernization programmes at Belaya Kalitva undertaken last year, which included installation of a new plate cutting line, lead to a 31.6% increase of its production.

ROSTAR continued to increase its output following the growth of the beverage can market in Russia and this was supported by stable supplies of high quality can strip from Samara where substantial upgrades had been made to improve the quality of can-related semi products.

Modernization programmes are continuing at Armenal as part of its 10 year $34 mln. investment programme.  Modernization of the plant was accompanied by upgrading the foil semis production at Samara and alloy production at Bratsk Smelter, which altogether helped to raise Armenal’s output by 294%. RUSAL’s total foil output was raised by 43%, while forged product output increased by 29%

Highlights for the Q1 2003 included:

• RUSAL acquired the outstanding 26% stake in the Armenal foil mill from the Armenian government and obtained 100% control over the plant.
• Engineering consultants SNC Lavalin completed a feasibility study for the expansion of the Sayanogorsk smelter.
• A three-year framework agreement was signed with Germany’s Siemens for the full automation of the production process at the Armenal foil mill.  This will result in improving production efficiencies and a 20% reduction of metallurgical equipment down time.
• Closing of $190 mln syndication of a pre-export credit facility arranged by BNP Paribas, Glencore International and Natexis Banques Populaires, further improving RUSAL’s debt structure.
• RUSAL appointed BNP Paribas as main financial adviser for the proposed project financing of Sayanogorsk smelter expansion.    
• Formation of a new subsidiary of RUSAL group, RUSAL-management company, part of a major reorganization and rationalization of the management structure.
• RUSAL Service Center established as a new maintenance division for the Group’s aluminium smelters; part of the programme to spin off non-core business functions.
• RUSAL’s Dmitrov rolling mill and Sayansk foil mill successfully passes ISO 14001 environmental certification, BAT received quality management ISO 9001 certificate, Dmitrov plant upgraded its quality management certification to ISO 9001: 2000. 

Other steps during the quarter included the extension and improvement of the terms of its global insurance agreement covering the company's property, business interruption losses and marine cargo risks worldwide. The company also signed a five-year voluntary medical insurance agreement with the Russian-based Max insurance company covering 61 000 employees at RUSAL’s 15 plants.

Table 1 – Production results (metric tons, unless otherwise noted)

Products	Q1/2003	Q1/2002	Yr on Yr Change (%)
Bauxite	1,005,430	419,321	*
Alumina	722,147	529,300	*
Primary aluminium & alloys	626,705	608,974	2.9
Aluminium semi products including:	61,617.7	49,678	24
Flat rolled products	49,196.5	40,018	22.9
Extruded and forged products	12,421.2	9,660	28.6
Foil	10,380.9	7,264	42.9
Aluminium beverage cans (‘000)	206,177.1	170,088	21.2
Other cans	20,981.4	18,213	15.2

* The sharp increase in bauxite and alumina production is due to the addition of the Friguia alumina refinery facilities in Guinea, after a 25-year lease management agreement was signed in December 2002.