AWJ13: UC Rusal

364"- The Taishet aluminium smelter in the Irkutsk region of Russia has a design capacity of 750 thousand tonnes of aluminium per annum.

The company was founded in 2000 and, following its merger with SUAL and the alumina assets of Glencore, became the global aluminium industry leader in 2007.

RUSAL has a 27.8% interest in Norilsk Nickel, the world’s largest producer of nickel and palladium and one of the largest producers of platinum and copper.

UC RUSAL is a leading global aluminium producer.

About UC RUSAL UC RUSAL is a leading, global producer of primary aluminium and alloys with a particular focus on the production and sale of value-added products and one of the world's major producers of alumina.

The company’s current capacity means it is able to produce 4.7 million tonnes of aluminium, 11.5 million tonnes of alumina and 80 thousand tonnes of foil per annum. In 2012 RUSAL accounted for approximately 9% of global production of aluminium and 8% of alumina.

RUSAL operates in 19 countries on 5 continents. The company employs 72,000 people across the globe.

RUSAL’s assets include 15 aluminium smelters, 12 alumina refineries, 8 bauxite mines, 3 aluminium powder plants, 3 silicon factories, 3 secondary aluminium plants, 4 foil mills, 2 cryolite and 2 cathode plants.

Within its upstream business, UC RUSAL is vertically integrated to a high degree, having secured substantial supplies of bauxite and alumina production capacity.

The Company’s core smelters, located in Siberia, Russia, benefit from access to stranded low-cost hydro generated electricity enabling it to be a lowcost producer of aluminium, with its principal Siberian facilities in close proximity to important European and Asian markets.

The Company’s key sales markets are Europe, Russia and the CIS countries, North America, South-East Asia, Japan and Korea. The major end users consist of over 700 companies representing transport, construction and package industries.

RUSAL has a strong growth potential – around 1 million tonnes of attributable aluminium capacity are currently under construction (equivalent to 25% of the current Company’s production volume): - The BEMO Project, which involves the construction of the 3,000 megawatt BEMO HPP and BEMO aluminium smelter in the Krasnoyarsk region of Russia with a design capacity of 588 thousand tonnes of aluminium per annum;

Together with Kazakhstan’s National Welfare fund “Samruk-Kazyna” RUSAL is developing the Ekibastuz coalfield in Central Asia.

RUSAL is currently focusing on strengthening its competitive advantages, including low production cost, considerable raw material base, proprietary R&D capabilities and proximity to key markets.

RUSAL owns proprietary smelting technologies (RA-300, RA-400 and RA-500) and is developing new ones, including a revolutionary inert anode technology.

RUSAL’s ordinary shares are listed on The Stock Exchange of Hong Kong Limited (Stock code: 486). Global depositary shares representing UC RUSAL’s ordinary shares are listed on the professional board of NYSE Euronext Paris (RUSAL / RUAL). Russian depositary receipts representing RUSAL’s ordinary shares are listed on the Moscow Exchange ( RUA L R / RUA L R S ) . RUS A L ' s shareholders are En+ (48.13%), ONEXIM Group (17.02%), SUAL's shareholders (15.80%), Glencore's subsidiary Amokenga Holdings (8.75%) and RUSAL's management.

There is a 10.03% free-float.

Official website: www.rusal.com

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BAUXITE MINING TO ALUMINA

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With todays technology, alumina and sometimes gallium are the only commercial products being extracted from bauxite ores.

Recycling red mud Annual world aluminium production is expected to break the 50,000,000 tonnes barrier this year. Making one tonne of aluminium requires about two tonnes of alumina. The production of two tonnes of alumina creates from two up to four tonnes of red mud or bauxite residue, presently waste from the Bayer process and a potentially valuable resource.

constituting industrial bauxites are Fe2O3 (from 5 to 25% mass, SiO2 from 1 to 9 %, TiO2 from 1 to 7 %). Like most ores and soils, bauxite can also contain trace quantities of metals such as beryllium, cadmium, chromium, lead, manganese, arsenic, mercury, nickel and naturally occurring radioactive materials. To achieve extraction of the main components, more advanced technologies are to be evolved.

The total amount of bauxite residue produced in the world annually is estimated at around 200 million tonnes. Red mud is a mineral residue left after the extraction of alumina from bauxite in the course of the Bayer Process, the principal industrial method of processing bauxite ores into alumina.

With today’s technology, alumina and sometimes gallium are the only commercial products being extracted from bauxite ores. Correspondingly, bauxite residue is primarily composed of the insoluble in the alkaline Bayer liquors fraction of the bauxite ore, and some Ca and Na aluminosilicates formed in the process as secondary reactions.

Bauxite is one of the most complex industrial ores, containing almost all elements of the periodic table in different quantities with alumina being the predominant component (making some 30 to 60% mass of all ore components). Other major oxides

At present, the amount of bauxite residue being processed is limited.

Alumina production waste is mainly disposed of in special facilities known as bauxe residue disposal areas (BRDAs).

Due to the Bayer process, red mud has residual alkalinity. The pH level of the

AWJ 2013

residue is generally up to 13 or higher in some cases, due to the presence of alkaline sodium compounds, such as sodium hydroxide. Because of the very small sizes of bauxite residue particles (less than 100 microns) it can be easily carried by wind over fairly long distances from BRDAs. To prevent the red mud from being carried out from BRDAs and causing harm to the environment or people, different methods are being used such as construction of new BRDAs with special membranes and protective layers, dry disposal, 'sloped deposition' etc. With regards to RUSAL, the company pays very special attention to the environmental safety at all of its operations and constantly monitors the situation at each of its BRDAs. Treatment methods include reducing pH by carbonation, washing with large quantities of seawater adding gypsum, other amendments such as bitterns, (all of which replace sodium with more favourable elements such as calcium and magnesium) as well as increasing

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364"Chinese national governments. For instance, RUSAL's recycling project was supported by the Ministry of Science as a next-generation technology. RUSAL's involvement in the red mud recycling project is one of the main focuses of the company in the sphere of environmental stewardship.

RUSAL’s Engineering and Technology Centre is the project's engine, which is supported by a think-tank, consisting of major Russian technology and engineering partners.

Bauxite is one of the most complex industrial ores, containing almost all elements of the periodic table. organic matter content by mixing in organic waste or establishing grass pasture to initiate the nutrient cycle.

This is the case of Queensland alumina refinery (QAL) in Australia (RUSAL owns a 20% stake in the refinery), where red mud is neutralized with seawater.

One way or another, the major problem is that there is no established bauxite residue processing technology that would be able to be applied at all the alumina refineries in the world because the bauxite composition (depending on the deposit) differs greatly. Finding a way to utilize the red mud in other industries, instead of disposing it in BRDAs, could develop as the best solution moving forward.

Today bauxite residue can be used in the steel industry as an ironcontaining raw material, in cement production, road construction as well as in agriculture. A part of the bauxite residue is used as an absorbent of industrial gas, to treat industrial and municipal wastewater, as a reductant for soil, absorbent of heavy metals

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and other harmful substances, as a coagulant, pigment, catalyst and ceramic.

RUSAL, which is one of the world’s largest alumina producers, is now building a pilot recycling plant at the Ural aluminium smelter (UAZ), Russia with an annual capacity of 40,000 tonnes looking to expand it up to 200,000 tpa. According to our analysis, the demand for red mud and its byproducts stands at 3 million tonnes per annum from Russian enterprises only, which can easily generate a return on planned investments. The main consumers of the plant in Russia will be the iron and steel industry and the construction sector.

Following the launch of this facility, UAZ will establish red mud treatment operations, -creating a new niche on the market- furthering the potential to implement the technology in other RUSAL plants.

Red mud recycling technologies are being cultivated by the Russian and

BAUXITE MINING TO ALUMINA

Bauxite residue can be used in the steel industry as an ironcontaining raw material.

The Chinese government has set a target of recycling 10% of all of its red mud by 2015, and our Chinese colleagues from Chalco have already introduced several solutions taken from the iron and rare-earth metals extraction industry, to use the residue for the steel and concrete industry.

The recent memorandum between UC RUSAL and Chalco foresees joint R&D projects, and we hope that together we can find ways to solve the red mud problem.

At present, the recycling of alumina production waste is a global challenge.

The maximum recycling rate is about 30% for an individual plant. Worldwide bauxite residue processing does not exceed 5 million tonnes per year, which means that less than 1/40th of the amount produced is currently recycled.

The industry targets regarding the red mud problem are quite ambitious.

The International Aluminium Institute predicts that at least 25% of all red mud will be recycled by 2025. This means that a comprehensive technology for complete bauxite residue processing to marketable value-added products is required to be developed.