RUSALS GROWTH STRATEGY: FROM RUSSIAN TO GLOBAL ALUMINIUM BUSINESS Pavel Ulianov, Managing Director C

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RUSALS GROWTH STRATEGYFROM RUSSIAN TO GLOBAL
ALUMINIUM BUSINESSPavel Ulianov, Managing
DirectorCorporate Strategy and Development

• 10th CRU World Aluminium Conference
• June 13, 2005

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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 US5.4 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 US534 million in 2004
• Over 50,000 employees

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From Siberia to the World
We operate in 7 Russian regions and 11 other
countries, plus we sell to customers throughout
the world
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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 RD 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

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Building and sustaining truly global
competitiveness

• 1. Technological edge
• Proprietary aluminium smelting technology RA-300
  (300 kA)
• RD 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

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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

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Dynamic growth in aluminium smelting
Production grown by 49 (from 1.8 to 2.7 million
tonnes)
Of which Creep/efficiency 200 kt MA 700
kt Bratsk 150 kt Krasnoyarsk 240 kt
Novokuznetsk 310 kt
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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 MA 2,400
kt Nikolaev 460 kt Achinsk 350 kt
Friguia 770 kt Boxitogorsk 50 kt
20 of QAL 770 kt
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Achieving our vision

• To become the worlds 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 worlds lowest-cost
  capex-per-tonne producers
• Double current labour productivity
• Enhance our employer of choice status(quality
  work environment and competitive salary)

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Aluminium industry cost curve
RUSAL well positioned in terms of aluminium costs
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A clear strategy for delivery alumina
Development plan for alumina capacity to 2013
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Attaining growth through 80 alumina
self-sufficiency
4.8mt of alumina capacity added by 2013
Territories for growth
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A clear strategy for deliveryaluminium
Development plan for aluminium capacity to 2013
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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

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Power projects to bolster growth
Smelter fuel sources

• Security of power supply and pricing is an issue
  for the industry
• Rusals power advantage lies in Russia and former
  republics
• Rusal is involved in power projects for 44 of
  its greenfield smelter capacity

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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

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Investing in World Class assets
On 1 April 2005, RUSAL acquired 20 shareholding
in Queensland Alumina Limited (QAL)

• 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

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QAL a bridge to the future

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

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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 MA activity with prudent
  assumptions
• Continue to monitor and control costs (especially
  in alumina)
• Improve internal processes and risk management
  procedures to enable controlled and orderly growth

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Instinct for Growth

• www.rusal.com
• Phone [phone]
• Fax [phone]