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RusAl Names Liaison For Kremlin Relations
Russian Aluminum appointed a new director on Tuesday to liaise with the Kremlin as it prepared to sign a deal creating a $30 billion market leader that will supply 12 percent of the world's aluminum.
A merger with domestic rival SUAL and the alumina assets of Swiss commodities trader Glencore would be subject to the same terms outlined in a memorandum last month that gave RusAl a 64.5 percent stake in the enlarged company, local media reported.
"It's most likely to happen today. But it may also happen tomorrow," a source close to the deal said.
RusAl and SUAL declined to comment. SUAL's board met Tuesday, and local media said the merger might be on its agenda.
RusAl said it had appointed Valery Draganov as managing director for government relations. Draganov, a former head of the State Customs Committee, is a deputy representing United Russia in the State Duma.
His post would involve liaising with government institutions and developing projects involving partnerships between the state and private enterprises, RusAl said in a statement.
Vedomosti said a deal would be signed on Wednesday and would be similar in structure to the memorandum that gave SUAL 21.5 percent and Glencore 14 percent.
Kommersant said President Vladimir Putin gave his blessing to the deal in a meeting Friday with RusAl owner Oleg Deripaska, SUAL's main owner, Viktor Vekselberg, and a senior Glencore official.
A combined aluminum company would be the world's largest producer of the metal, used in cans, cooking foil and cars, leapfrogging Alcoa and Alcan.
"Whenever you get a deal of this size, it's going to send a wave through the industry," MDM Bank mining and metals analyst Michael Kavanagh said.
RusAl is currently the world's third-largest aluminum producer, accounting for 8.5 percent of global output. SUAL supplies about 3.2 percent of world output.
RusAl plans to invest $16.7 billion in power, raw materials and smelting by 2013, raising aluminum output to more than 5 million tons per year from 2.8 million last year.
SUAL produced 1.1 million tons last year and wants to double output by 2012.
Glencore, under the original proposal, was to contribute alumina refining assets to the new company, including the Aughinish refinery in Ireland, which it owns outright, and Windalco and Alpart in Jamaica, where it owns majority stakes.
It was also to contribute its 44 percent stake in the Eurallumina refinery in Italy and its wholly owned Kubikenborg Aluminum smelter in Sweden.
A source close to the deal said last week that Glencore's assets might not be included, although this was not confirmed by other parties in the talks. Glencore has declined to comment.
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