Russian Metals Giant Plans Split to Focus on Green Aluminum

(Bloomberg) -- Russian metals giant United Co. Rusal International PJSC plans to split off its higher-carbon assets, leaving a business focused on the fast-growing green aluminum market.

Rusal, along with other producers such as Alcoa Inc. and Rio Tinto Group, is driving the development of so-called “green aluminum,” with automakers and other consumers charged a premium for metal with a smaller carbon footprint. Under Rusal’s plan, its management has proposed changing the name of the company to AL+ as it seeks to become a key player in that potentially lucrative market.

“Rusal would focus on reinforcing its position as a leading producer of low-carbon aluminum and the new company would concentrate on the development of the domestic market and its growth potential,” the company said Wednesday in a statement.

READ: Russian Metals Giant Ups Ante in Race for Greenest Aluminum

AL+ will include the newest Khakas and Boguchansky smelters as well the Taishet project and international alumina and mining facilities. The Russian plants work on hydro-power. The new company will house assets, including the Bratsk and Irkutsk aluminum smelters, as well the Achinsk alumina refinery and Russian mining assets.

Last month, Rusal’s parent En+ Group International PJSC said the company has produced aluminum with the lowest carbon footprint as the race for cleaner sources of the metal intensifies.

En+’s board of directors suggested that in the interests of Rusal’s shareholders it would be better for the higher-carbon business to be listed on the Moscow Exchange. Its shares should be allocated to current Rusal owners on a pro-rata basis, it said. Still, no final decision has been taken and Rusal will study all potential options for the deal. The split would also require regulatory approval.

Rusal’s almost 28% stake in MMC Norilsk Nickel PJSC will remain in AL+ as it is party to the Russian miner’s shareholder accord. Nornickel dividends are important for the company’s investment program, Rusal said.

Rusal shares declined 4.4% as of 3:47 p.m. in Moscow trading.

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