RUSAL continues on growth path with a 4.9% increase in smelting production Moscow, October 28 /PRNewswire/ -- 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 aluminium 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 US$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 US$2 bln. Loans from western banks (including trade and pre-export financing) currently total about US$700 mln. Capital attracted through ruble bonds exceeds US$200 mln., long term investment loans (over five years) account for over US$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) Product Third quarter Yr-on-Yr Nine months Yr-on-Yr Change Change (three (nine months,%) months, %) 2003 2002 2003 2002 Bauxite(1) 1 029 854 458 244 124.74 3 127 702 1 303 126 140.02 Alumina(1) 757 776 548 600 38.13 2 216 192 1 609 200 37.72 Primary 655 139 624 379 4.93 1 923 999 1 849 971 4.00 aluminium & value added casthouse products Aluminium 52 760 56 642 -6.85 163 868 151 980 7.82 semi products including: Flat rolled 42 249 47 526 -11.10 132 047 126 468 4.41 products Extruded and 10 511 9 116 15.30 31 821 25 422 25.17 forged products Foil 12 349 9 982 23.71 34 863 25 634 36.00 Aluminium 253 160 193 801 30.63 747 434 595 117 25.59 beverage cans ('000) Other cans 14 020 18 820 -25.50 50 425 62 343 -19.12 ('000) (1) The sharp increase in bauxite and alumina production is due to the addition of the Friguia alumina refinery facilities in Guinea. Table 2 - Bauxite & Alumina (metric tons) Mines and refineries Nine months Yr-on-Yr Change (nine months, %) 2003 2002 Compagnie des Bauxites de 1419 927 1 303 126 8.96 Kindia (Guinea) - bauxite Alumina Company of Guinea - 1707 775 - bauxite Alumina Company of Guinea - 543 092 - alumina Achinsk Alumina Refinery 786 400 772 400 1.75 (RUSAL Achinsk) Nikolayev Alumina Refinery 886 700 836 300 6.03 Table 3 -Primary Aluminium (metric tons) Smelters Nine months Yr-on-Yr Change (nine months, %) 2003 2002 Bratsk Aluminium Smelter 693 807 684 165 1.41 (RUSAL Bratsk) Krasnoyarsk Aluminium Smelter 671 520 645 717 4.00 (RUSAL Krasnoyarsk) Sayanogorsk Aluminium Smelter 338 879 305 413 10.96 (RUSAL Sayanogorsk) Novokuznetsk Aluminium Smelter 219 793 214 676 2.38 (RUSAL Novokuznetsk) 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) 136 619 143 580 -5.03 Belaya Kalitva Metallurgical Plant 30 400 27 587 9.13 (RUSAL Belaya Kalitva) 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 1 073 066 4.43 Dmitrov Metallurgical Plant (RUSAL Dmitrov) 50425 62 343 -19.12 ('000 cans) Dmitrov Metallurgical Plant (RUSAL Dmitrov) 93696 79 267 18.20 ('000 ends) 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. Website: http://www.rusal.com/ DATASOURCE: RUSAL For further information: Eugenia Harrison, Moscow, +7 095 720 5170, or ; Fred Harrison, London, +44 (0) 20 7431 7517, or ; Stan Neve, New York, +1 212 333 3810, or

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