ALSCON (NIGERIA) 
February 27, 2007
RUSAL closed a deal to acquire a majority stake in the Aluminium Smelter Company of Nigeria (ALSCON) from Ferrostaal AG in Essen, Germanny, Mrs. Julie Kenny the senior representative of the UK subsidiary Allumina Trade LLP confirmed.

According to the terms of the deal, RUSAL purchased a 77.5% block of shares in ALSCON, a 193,000-tonne smelter (reduction, anode-producing and casthouse areas), a port on the Imo River and a power-generating station. Germany’s Ferrostaal AG and the Government of Nigeria remain minority shareholders with 7.5% and 15% blocks respectively.

ALSCON produced its first metal in 1997, but was never fully completed before it suspended production in 1999. Its output during the short period of operations totaled 40,000 tonnes of aluminium.

Geography

Akwa Ibom is one of Nigeria’s 36 states with a population of 3.9 million people. It was created in 1987 from the former Cross River State and is a major oil-producing area in the country. The state’s capital is Uyo, home to some 500,000 people and a prominent academic centre (University of Uyo). Along with English, the main languages spoken here are Ibibio, Annang, Eket, Ibeno and others.

In 2000, the smelter was brought to a standstill with high production costs, inadequate gas supply, complicated marine access and lack of working capital cited as the main reasons. ALSCON was re-launched after the modernisation completed by UC RUSAL in February 2008.

Once the smelter reaches its full capacity, it will create 1,900 local jobs and 90% of the employees will be Nigerian citizens. Additionally, 20,000 jobs could be created in the downstream aluminium manufacturing sector and through the development of infrastructure around the smelter, resulting in a positive improvement in the standard of living for Akwa Ibom state residents.

Development and Environment

The terms of the deal include the dredging of the Imo River necessary to create the transport infrastructure. RUSAL plans to allocate more than USD 150 million over three years to refurbish ALSCON and turn it into a state-of-the art facility.

As a signatory of the UN Global Compact, we are committed to maintaining the best standards of environment and quality management. We also regularly meet with community leaders and other companies present in Akwa Ibom to jointly work out ways to improve the economic and social situation in the town of Ikot Abasi, home to ALSCON.