OREANDA-NEWS. UC RUSAL (SEHK: 486, Euronext: RUSAL/RUAL, Moscow Exchange: RUALR/RUALRS), a leading, global aluminium producer, announces that it has signed a Memorandum of Intent (“MOI”) with the State Corporation 'Bank for Development and Foreign Economic Affairs (Vnesheconombank)' (“VEB”) to convert RUSAL's loss-making smelters.

RUSAL and VEB intend to work together to create production facilities to produce aluminium- and aluminium alloys-based automotive components, rolled and cable products.

The finished goods are intended to be supplied to the Russian market. For example, both Russian and foreign carmakers who have certain commitments to increase the share of Russian-made parts used by their facilities, will be among the potential consumers of such autocomponents. As a party to the agreement RUSAL is ready to attract investors, provide them with the existing industrial infrastructure and ensure that aluminium is supplied to production sites.

VEB, in turn, will consider its participation in investment projects which have been proposed by RUSAL and that are in line with VEB's investment and financial policies.

The parties intend to commence joint meetings with potential investors to explain the industrial production specifics and the investment projects' financial structure.

The new facilities will be sited at the Bogoslovsk, Urals, Nadvoitsy, Kandalaksha, Volkhov and Volgograd aluminium smelters or at other plants located in the respective federal subjects of Russia.

“In today's negative market environment, attracting new partners to build new facilities to produce high tech value-added aluminium goods will promote Russia's industrial development, create more jobs and contribute to wider aluminium consumption growth. This will in turn help to restore a supply and demand balance in the industry,” commented Alexey Arnautov, Director of RUSAL's Aluminium Division West.

RUSAL has already started the process of converting its loss-making facilities with the signing of a memorandum of understanding with the Israeli company, Omen High Pressure Die Casting (“Omen”). This memorandum outlined details of the creation of a joint venture (JV) to produce automotive components. The JV will be sited at the Volkhov aluminium smelter (VAZ).

The memorandum with VEB will significantly expand opportunities to attract new partners and investors.