MOSCOW, 28 October, 2003 – RUSAL, one of the world’s leading aluminium companies, today announced healthy growth in output across all its main product lines for the third quarter of 2003. Smelting production showed a record 4.93% year-on-year increase.

As a part of its aim to double aluminum production in the next decade and become one of the world leaders in production, RUSAL is strongly committed to improving its technology and production facilities. The Engineering and Technological Center (ETC), introduced earlier this year, has become a coordinator of the on-going upgrading programs. RUSAL’s recent acquisition of All-Russian Aluminium Magnesium Institute (VAMI), a researching organization, also demonstrate the company’s clear interest in developing new technologies to raise the quality and quantity of its products and will stimulate progress in upgrading projects.  

Alexander Boulygine, chief operating officer of RUSAL said, “This has been a quarter of organizational change combined with continued progress in our core production capacity. Recent changes in RUSAL’s shareholding structure allow the management team's full focus on the strategic goals of doubling aluminium production over the next decade. Our strong operational platform, sound liquidity and strong cash flows, leave us well placed to pursue this goal.”

Mr. Boulygine also noted the importance of RUSAL’s recent acquisition of VAMI, Russia's centre of excellence for metallurgical research and development. “VAMI will further increase RUSAL’s competitive advantage on the global stage by allowing us to tap in and benefit from Russia's scientific knowledge base to develop new and improved production technologies and techniques for RUSAL,” he said.

Operational Overview:

The growth in smelting production was achieved primarily by increased amperage and current efficiency at the Sayanogorsk and Krasnoyarsk aluminium smelters by further improvements in technological processes as well as the addition of several new cells. Cell amperage rose by 7 kA year-on-year at RUSAL Krasnoyarsk in Q3’2003 and by 7 kA at RUSAL Sayanogorsk for the same period. Current efficiency increased by 0.25% for the last three months year-on-year at RUSAL Krasnoyarsk and by 2.7% at RUSAL Sayanogorsk for the same period.

RUSAL’s increased focus on value-added products at its smelting operation resulted in a 42.3% year-on-year growth in the first nine months of 2003. Substantial progress has been made on the long-term agreement signed by RUSAL and Hydro Aluminium last year for production and sourcing of high quality extrusion ingots, one of the major RUSAL’s projects in that area.  Supply and installation of equipment is almost completed, start up planned in December this year.

RUSAL’s $750 mln. project to build a new 270,000 ton smelter at Sayanogorsk by 2006 is proceeding according to plan. Preparatory work at the site in addition to designing the reduction and casting areas of the future smelter have been initiated.  The project recently passed environmental impact assessment.
With the addition of Friguia’s bauxite and alumina facilities into RUSAL’s production chain, raw material production increased sharply. The modernisation programme continued at the Nikolayev Alumina Refinery, which aims to raise the plant’s output to 1.3 mln. tons by 2005 and together with the optimisation of existing production facilities at Achinsk Alumina Refinery, will help further raise the two plants’ alumina production.
Production of aluminium semis demonstrated a slight decrease due to exclusion of low-margin products from the mix as well as due to continuing rationalisation of RUSAL’s rolling facilities which involves the transfer of some equipment amongst the group’s downstream plants.
Aluminium beverage can production showed a sharp increase reflecting the trend on the domestic can market.

Recent Highlights Include:

• Change in RUSAL’s ownership structure, representing acquisition of a further 25% stake in the company by shareholder Basic Element from Millhouse Capital, was announced. This increased Basel’s shareholding to 75%. 

• RUSAL increased its overall debt to approximately $2 bln. Loans from western banks (including trade and pre-export financing) currently total about $700 mln. Capital attracted through ruble bonds exceeds $200 mln., long term investment loans (over five years) account for over $100 mln. The remaining borrowings are term loans from a variety of Russian banks. About 70% of RUSAL's borrowing is long-term (more than one-year) funds.

• US$30 mln. modernisation is continuing at Samara Rolling Mill aimed at increasing the volume and quality of its can stock and turning the mill into one of the world’s leading can stock producers. 

• Start-up of a new casthouse at Bratsk Aluminium Smelter to produce multi-component alloys for sheet and foil production with annual capacity of over 70,000 tons. The addition of the casthouse will help to raise annual alloy production volume at Bratsk to 100,000 in 2004, which is a four fold increase over 2002.

• RUSAL’s Engineering and Technological Centre began to develop a modernisation programme for Novokuznetsk Smelter.

• RUSAL SAMARA Received ISO 14 001 Environmental Certification. Currently, all RUSAL’s key plants are either ISO 14 001 certified or preparing for the certification.

• RUSAL’s Engineering & Technology Center, in collaboration with Hatch Kaiser, began feasibility studies for Sayanogorsk and Krasnoyarsk modernisation projects.

• RUSAL’s Sayanogorsk Aluminium Smelter received an award for labour safety from the Russian Mining Complex Association and the Central Sector Trade Union Council.

• A new dry gas scrubber designed by RUSAL and VAMI was introduced at Krasnoyarsk Smelter.

• As part of a programme to increase cell amperage at Sayanogorsk, 4 new 260 kA cells have been introduced. 5,300 kA cells developed by RUSAL’s Engineering and Technological Centre.

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

Table 2 – Bauxite & Alumina (metric tons)

Mines and refineries	Nine months		Yr-on-Yr Change (nine months, %)
	2003	2002
Compagnie des Bauxites de Kindia (Guinea) – bauxite	1419927	1 303 126	8.96
Alumina Company of Guinea– bauxite	1707 775	*	-
Alumina Company of Guinea– alumina	543 092	*	-
Achinsk Alumina Refinery (RUSAL Achinsk)	786 400	772 400	1.75
NikolayevAlumina Refinery	886 700	836 300	6.03

Table 3 –Primary Aluminium (metric tons)

Smelters	Nine months		Yr-on-Yr Change (nine months, %)
	2003	2002
BratskAluminium Smelter (RUSAL Bratsk)	693 807	684 165	1.41
KrasnoyarskAluminium Smelter (RUSAL Krasnoyarsk)	671 520	645 717	4.00
Sayanogorsk Aluminium Smelter (RUSAL Sayanogorsk)	338 879	305 413	10.96
NovokuznetskAluminium Smelter (RUSAL Novokuznetsk)	219 793	214 676	2.38

Table 4 –Downstream Production (metric tons unless otherwise noted)

Plants	Nine months		Yr-on-Yr Change(nine months, %)
	2003	2002
Samara Metallurgical Plant (RUSAL Samara)	136619	143 580	-5.03
BelayaKalitva Metallurgical Plant (RUSAL BelayaKalitva)	30400	27 587	9.13
RUSAL SAYANAL	26318	24 566	7.13
RUSAL ARMENAL	9614	3 306	190.8
RUSAL ROSTAR (‘000 beverage cans)	747434	595 117	25.59
RUSAL ROSTAR (‘000 ends)	1120590	1073 066	4.43
Dmitrov Metallurgical Plant (RUSAL Dmitrov) (‘000 cans)	50425	62 343	-19.12
Dmitrov Metallurgical Plant (RUSAL Dmitrov) (‘000 ends)	93696	79 267	18.20

About RUSAL
RUSAL, a world leader in aluminium production, was formed in March 2000 from the merger of a number of the largest smelters and other aluminium producers located in the CIS. The company accounts for 75% of Russia's primary aluminium output and 10% of the global primary aluminium output. RUSAL is a fully vertically integrated company with a complete production cycle from bauxite mining and the production of raw materials, to the production of primary metal, semi-products and aluminium-based end products. RUSAL is headquartered in Moscow.
For further information:
www.RUSAL.com
Eugenia Harrison, Moscow, +7 095 720 5170, or zharrison@RUSAL.ru; Fred Harrison, London, +44 (0) 20 7431 7517, or fharrison@ansdellconsult.com; Stan Neve, New York, +1 212 333 3810, or sneve@brunswickgroup.com