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Rusal signs major deal with Chinese arms maker

A File Photo.

MOSCOW (AFP/PTI): Russia's UC Rusal, the world's biggest aluminium producer, will supply Chinese defence industry firm Norinco with 1.68 million tonnes of aluminium from 2010 to 2016, the two companies said Monday.

The value of the contract with the China North Industries Corporation (Norinco) was not made public in their statement. Rusal said sales to China were set to account for five percent of its sales in 2009 and it hoped 10 per cent of its revenue by 2015.

"The metal will be shipped to Norinco from UC Rusal's Siberian smelters, which are favourably located in proximity to UC Rusal's Chinese clients," the joint statement said.

The deal is consistent with Rusal's goal of increasing its presence in China's rapidly growing economy, chief executive Artem Volonyets said in the statement.

"We consider China a long-term driver for aluminium demand due to its rapid pace of urbanisation and industrialisation," he said.

Rusal, a privately held company run by billionaire Oleg Deripaska, hopes to restructure several billion dollars worth of debt this month and conduct an initial public offering (IPO) by December, according to media reports.

The global economic crisis and a steep drop in the price of metals since last year has left Rusal with an estimated debt of USD 14 billion to foreign creditor banks.

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