Moscow 17 June 2003: SUAL Group, RAO UES (Unified Energy System of Russia) and the Government of the Komi Republic signed a trilateral agreement to secure a long-term power supply for the Komi Aluminium project. Under this agreement, Pechora GRES power station will provide energy capacity for the SUAL Group’s proposed integrated aluminium production complex known as the Komi Aluminium project. In return, SUAL will support the reconstruction and extension of capacity at this power station.

The development of a sixth power generator at Pechorskaya will increase the capacity of the power station to 1275 mw. RAO UES will then reserve approximately 860 mw of this power capacity for this project currently under consideration by SUAL.

The Komi Aluminium project foresees annual production of 1.4 million tonnes of alumina and 300,000 to 500,000 tonnes of primary aluminium. The project will utilise more than half of the potential capacity of Pechora power station, which is currently under-utilised. The agreement signed today specifies that electric energy shall be supplied on the basis of a Direct Contract Agreement.

The Komi Republic’s government has agreed to assist SUAL in the selection of construction sites, establishing favourable conditions for attracting investment and developing energy generating capacities.

Vladimir Kremer, Komi Aluminium Director General, said:
“This long-term agreement for power supply will provide access to the crucial international investments needed to realise the Komi Aluminium project, which will be good for both the SUAL Group and the region’s development.”

Nikolay Levitsky, First Deputy Head of the Komi Republic said:
“The Komi Republic strongly supports the Komi Aluminium project which we would like to see fully operational as soon as possible. The project will be a good source of revenue for the region and will create about 10,000 jobs.”

Notes to Editors

Komi Aluminium is the SUAL Group’s project to develop an integrated bauxite/alumina/aluminium complex. This is expected to achieve annual production of up to 6 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.