UC Rusal, a metals segment of EN+ Group, is pursuing a demerger of its higher carbon assets in order to form two businesses with separate strategies. The move is inline with the company’s ambitious environmental goals and strategy to achieve carbon neutrality by 2050, while continuing to grow its share of value-added products (VAP).
Rusal will focus on reinforcing its position as a leading producer of low-carbon aluminum and will be renamed AL+, reflecting the company’s core values and focus on environmental stewardship. In addition, the newly formed company (temporarily named NewCo) will concentrate on the development of the domestic Russian market and its growth potential.
“As the sustainability movement gathers pace around the world, the proposed demerger would represent the next chapter in our journey and is firmly in the interests of both companies, enabling AL+ to focus on its net zero priorities, further promoting its industry leading low-carbon brand ALLOW, while the newly created company would concentrate on delivering a long term modernization program,” explained Bernard Zonneveld, chairman of the board of directors, Rusal. “The proposed transformation would allow both companies to unlock their full potential. I believe that the proposed separation of assets with different carbon footprints will open the door for future shareholder value creation and will accelerate growth opportunities.”
AL+ to Focus on Sustainability
Following the demerger, AL+ will retain the majority of the company’s production assets, including the inert anode technology development, which is in pursuit of carbon-free aluminum production. The company noted that thanks to its extensive usage of clean energy sources, such as hydropower, it is committed to providing the market with the lowest carbon footprint aluminum possible. This is reflected in the company’s launch of its low-carbon aluminum brand ALLOW. As AL+, the company believes it will be better positioned to reach its full potential as a sustainable business.
“[This] marks a bold new era for our company, which during its last 20 years, has come a long way from a primary aluminum producer to a preferred supplier of high-quality, sustainable VAP products for leading global brands,” said Evgenii Nikitin, general director of Rusal. “This transformation represents our commitment to our core values and environmental stewardship progress as we continue along our journey as a clean, low-carbon, transparent aluminum and VAPs producer. Sustainable growth is the only possible basis for the development of industries around the world and we will continue the implementation of our ambitious ESG strategy.”
Demerged Company
Concentrating on the Russian and other growing local markets, NewCo will be established as as a public company in the Russian Federation and listed on the Moscow Exchange. The company will be comprised of several high-carbon assets, including the alumina refineries in Russia and smelters in Bratsk, Irkutsk, Novokuznetsk, Volgograd, and Kandalaksha.
Under the new company, these assets will undergo an environmental modernization program. Through this program, the company will replace most of its previously installed electrolysis lines with new ones using the most up-to-date prebaked anode smelting technology.
The proposed transformation will require a consultation with all company stakeholders and may be subject to regulatory, lender, shareholder, and other third-party approvals.