Russia's Rusal eager to enter China's aluminium sector

Russia's leading aluminum maker Rusal wants to enter China's aluminum downstream production industry through joint ventures, Rusal CEO Vladislav Soloviev said at the World Economic Forum in Davos on Friday.

Soloviev said he sees the downstream aluminum production industry, which makes aluminum products such as wires and alloys, has big potential to develop in China as the country has the benefit of economies of scale and market demand.

Currently Rusal has a partnership with China North Industries Corporation established in 2011, under which Rusal bought a 33 percent stake in Shenzhen North Investments Corporation Limited, a trading affiliate of China North Industries Corporation specializing in aluminum, alloys and non-ferrous metals. The share purchase led to the establishment of the joint venture company North United Aluminium, which started production in 2012. But Soloviev said this joint venture is a very small part of Rusal's global business.

Soloviev said Rusal now hopes to strategically expand into China by exporting Russian-produced aluminum, believing that the hydro-power generated aluminum produced by Russia is more environmentally friendly than the coal-produced aluminum of China, which he sees will face a reduction as China increases its environmental protection measures. He said if China's own aluminum production reduces volume in the future, Rusal is keen to export more to China as well as set up joint ventures with Chinese firms in downstream aluminum production.

Soloviev said he sees many opportunities for further China-Russia business cooperation, especially because Russia has great infrastructure demand which can benefit from Chinese technology, equipment and capital.

One example of this type of cooperation is the potential partnership between Rusal's major shareholder, En+ Group and China's largest hydropower developer China Three Gorges Corp, to develop hydropower projects in Russia.

Oleg Deripaska, En+ Group owner, who is also president of Rusal, said in a previous interview that his group is looking for more cooperation with China Three Gorges.

Russian hydropower company RusHydro and China Three Gorges signed a deal in 2015 to cooperate on a 320 megawatt hydroelectric power project on the Bureya River in Russia's Far East.