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10th CRU World Aluminium Conference June 13, 2005

RUSAL’S GROWTH STRATEGY: FROM RUSSIAN TO GLOBAL ALUMINIUM BUSINESS Pavel Ulianov, Managing Director Corporate Strategy and Development. 10th CRU World Aluminium Conference June 13, 2005. A global leader, from Russia. Formed in 2000: just five years ago!

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10th CRU World Aluminium Conference June 13, 2005

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  1. RUSAL’S GROWTH STRATEGY:FROM RUSSIAN TO GLOBAL ALUMINIUM BUSINESSPavel Ulianov, Managing DirectorCorporate Strategy and Development 10th CRU World Aluminium Conference June 13, 2005

  2. A global leader, from Russia • Formed in 2000: just five years ago! • Top 3 producer of aluminium and alloys globally • 9.9% of global aluminium production • 2.7 million tonnes of aluminium produced in 2004 • Over US$5.4 billion in annual sales in 2004 • Today, 63% of products sold directly to end-users (in 2000, 80% via middlemen traders) • Production development and expansion investments exceeded US$534 million in 2004 • Over 50,000 employees

  3. RUSAL Rostar RUSAL Dmitrov RUSAL Mosmek RUSAL Achinsk RUSAL Krasnoyarsk RUSAL Rostar-Vsevolozsk RUSAL Bratsk RUSAL Boksitogorsk Moscow Headquarters * RUSAL Germany (Dusseldorf) * RUSAL Sayanogorsk RUSAL Sayanal * RUSAL Construction Profiles * RUSAL Novokuznetsk * RUSAL America Corp. (New York) RUSAL China (Beijing) RUSAL Japan (Tokyo) BCGI (Guyana) RUSAL Singapore * ACG (Friguia) Nikolayev Refinery CBK RUSAL Armenal Queensland Alumina Ltd. * RUSAL Australia Mining and Refining Fabrication Smelting * Office From Siberia to the World We operate in 7 Russian regions and 11 other countries, plus we sell to customers throughout the world

  4. Competing in global markets Advantages • Dynamic company with strong management, focused on growth • Access to Siberian hydro power plants (low-cost energy supplied at average price) • Enormous productivity gains run counter to rising industry costs • A loyal and expanding client base • Strong technological R&D base (ETC and VAMI) Challenges • Dependence on purchased alumina to supplement internal production • Remoteness of smelters from customers and raw materials • Soderberg technology limits performance of some smelters • Improving environmental performance

  5. Building and sustaining truly global competitiveness 1. Technological edge • Proprietary aluminium smelting technology RA-300 (300 kA) • R&D centre currently testing more advanced cell with 400 kA (RA-400) • Few competitors have such technological capability: Alcan, Alcoa, Norsk Hydro, China 2. Productivity surge • Reduced workforce from 73,000 in 2000 to approximately 47,000 today has dramatically increased labour efficiency and narrowed the gap with competitors • From 77 tonnes per employee in 2000 to 137 tonnes per employee in 2004

  6. Building and sustaining truly global competitiveness 3. Adding value • Value added product sales (alloys, billets etc) grown from around 15% in 2000 to roughly 40% today • Ambitious but realistic target to raise this share to 50% by 2013 • Agreement with Alcoa allows RUSAL to focus on key businesses 4. Customer focus • Sales to global traders dropped from 80% to just 15% of total volume • Since 2000 new sales offices established in US, Germany, Japan and Singapore • Smelter distance not a barrier to improved customer service

  7. Dynamic growth in aluminium smelting Production grown by 49% (from 1.8 to 2.7 million tonnes) Of which Creep/efficiency: ~200 kt M&A: ~700 kt Bratsk: ~150 kt Krasnoyarsk ~240 kt Novokuznetsk ~310 kt

  8. Dynamic growth in alumina refining • Increased by 2.6 million tonnes or 217% to 3.8 million tonnes • From 7th to 5th position in global league table • Self sufficiency grown from 35% to over 70% Of which Creep/efficiency: 200 kt M&A: 2,400 kt Nikolaev 460 kt Achinsk 350 kt Friguia 770 kt Boxitogorsk 50 kt 20% of QAL 770 kt

  9. Achieving our vision To become the world’s largest and most profitable aluminium producer by 2013, RUSAL will: • Grow aluminium production to 5 million tonnes per year • Grow alumina production to 8 million tonnes per year • Raise alloy production to 50% of overall out-put • Position RUSAL as one of the world’s lowest-cost capex-per-tonne producers • Double current labour productivity • Enhance our employer of choice status(quality work environment and competitive salary)

  10. A clear strategy for delivery: alumina Development plan for alumina capacity to 2013

  11. Attaining growth through 80% alumina self-sufficiency 4.8mt of alumina capacity added by 2013 Territories for growth

  12. A clear strategy for delivery:aluminium Development plan for aluminium capacity to 2013

  13. Attaining aluminium growth 2.3 mt of aluminium capacity added by 2013 • Greenfield projects should account for 81% of the growth • Khakassky shown as the only brownfield – 13% of growth • All smelters should add 4% to capacity through creep • Current plan assumes only 9% of growth outside Russian Federation

  14. Power projects to bolster growth Smelter fuel sources • Security of power supply and pricing is an issue for the industry • Rusal’s power advantage lies in Russia and former republics • Rusal is involved in power projects for 44% of its greenfield smelter capacity

  15. Leveraging opportunitiesin Russia: Komi Project Highlights • Komi region start-up planned by 2008 • Bauxite reserves JORC 190 mt. Annual volume 1,400 kt • RUSAL equity share 700kt • RUSAL acquired 50% in the project from its current promoter, SUAL • SUAL and RUSAL will jointly manage the construction and the new assets under a shareholder agreement • SUAL will also sell 500 to 700 kt of alumina to RUSAL Rationale • Reduces alumina transport cost for RUSAL • Reduces dependence on the spot alumina market for RUSAL • IFC/EBRD involvement – provides international recognition • Government support – positive for both companies

  16. Investing in World Class assets • largest alumina refinery in the world • producing 3.85 million tonnes p.a. • a joint venture between RUSAL (20%), Comalco (38.6%) and Alcan (41.4%) • largest ever Russian investment into Australia On 1 April 2005, RUSAL acquired 20% shareholding in Queensland Alumina Limited (QAL)

  17. QAL: a bridge to the future Increases RUSAL’s alumina supply: • RUSAL’s equity alumina production increases from 3.3 Mt to approximately 4.1Mt (+24%) • RUSAL’s share of QAL production (770Kt) currently meets 15% of RUSAL’s Siberian smelter needs QAL has significant expansion potential to over 5Mt p.a. • QAL owners will continue to evaluate expansion options for the refinery

  18. Priority issues for next 10 years • Efficient greenfield construction • lower capex, capital control, deliver on time and to budget • Development of improved (operationally and capex wise)technologies, for example RA 400 • Raise capacity creep • increase current efficiency at current smelters • Active value adding M&A activity with prudent assumptions • Continue to monitor and control costs (especially in alumina) • Improve internal processes and risk management proceduresto enable controlled and orderly growth

  19. Instinct for Growth www.rusal.com Phone:+7095-720-5170 Fax:+7095-728-4912

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