Russia’s Rusal Acquires Indian and Chinese Aluminium Manufacturers

Moscow based Rusal has signed an agreement with India’s Pioneer and KCap to purchase the Pioneer Aluminium Industries Limited alumina refinery, with capacity to produce 1.5 million tonnes per year, the Russian company said. Rusal are the world’s second largest aluminium manufacturer, accounting for almost 9% of the world’s primary aluminium output and 9% of the world’s alumina production.

Rusal will acquire up to 50% of Pioneer in three stages, including 26% at the first stage for US$243.75 million plus adjustments for the company’s working capital and debt. All subsequent stages of the transaction will be paid pro rata. The sellers and Rusal intend to supply bauxite to Pioneer and receive alumina from it in proportion to their respective stakes.

Pioneer owns an alumina refinery with capacity of 1.5 million tonnes per year, which could expand to 2 million tonnes, in the state of Andhra Pradesh, near the ports of Visakhapatnam, Gangavaram, and Kakinada on the southeast Indian coast, near to major ASEAN markets.

The acquisition by Rusal of a 30% stake in Chinese alumina producer Hebei Wenfeng New Materials Co. (HWNM) has risen to US$316 million, with the valuation process still ongoing. The consideration for the stake was initially US$264 million, however the terms of the transaction could be adjusted within twelve months of the transaction date. All rights attached to the interest acquired were transferred to Rusal in April 2024.

Rusal acquired its stake in HWNM to solve its problems with access to alumina, which worsened in 2022 after it lost access to the Nikolayev Alumina Refinery and alumina supplies from Australia in 2022. These sources together accounted for about 40% of alumina consumption. The purchase of HWNM has instead enabled Rusal to boost alumina output 25% to 6.43 million tonnes in 2024.

The supply chain disruptions caused by Western sanctions – in Rusal’s case supplies from Australia – has led Russian businesses with overseas supply chains to make investments in more friendly countries and to boost production instead in these markets. Australia imposes 35% tariffs on all trade with Russia, leading to it relocating trade and investment elsewhere. Australian exports to Russia have subsequently decreased by 67%.