OREANDA-NEWS. UC RUSAL (SEHK: 486; Euronext: RUSAL/RUAL; MICEX: RUALR; RTS: RUALR), the world’s largest aluminium producer, and PhosAgro (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers have opened an aluminium fluoride production plant in Cherepovets at PhosAgro-Cherepovets. The new plant will have a production capacity of 43,000 tonnes per year.

Russia’s Deputy Prime Minister Arkady Dvorkovich, Vologda Region Governor Oleg Kuvshinnikov, PhosAgro CEO Andrey Guryev and RUSAL CEO Vladislav Soloviev all took part in the opening ceremony. 

This investment project is valued at over RUB 2 billion, and was implemented by PhosAgro at its mineral fertilizer production plant, the largest in Europe, as part of a cooperation agreement with UC RUSAL through to the end of 2034 that amounts to over RUB 40 billion.

Following the renovations and upgrades, PhosAgro will increase aluminium fluoride production from 23,000 tonnes to 43,000 tonnes per annum, using aluminium hydroxide produced by RUSAL as part of the production process.

This project will enable RUSAL to reduce the volume of imported raw materials it purchases, thus reducing reliance on imports.

For PhosAgro, this project offers a guaranteed return on investment and will expand production and secure a long-term domestic consumer, while also creating job stability and ensuing a fuller and more complex use of the raw materials’ commercial components.

Every year, RUSAL purchases about 100,000 tonnes of aluminium fluoride. The opening of this new production capacity at PhosAgro-Cherepovets will enable to company to reduce its reliance on imported materials from 74% today to 60% in 2016.

Russian Deputy Prime Minister Arkady Dvorkovich said, “integrating the endeavours of two Russian companies that occupy leading positions in their sectors not only enables us to implement the kind of projects envisioned by the Russian Government’s modernisation and import substitution initiatives, it strengthens their respective market positions, and also serves to underpin the Russian economy’s continued development.

RUSAL CEO Vladislav Soloviev said, “This agreement enables RUSAL to resolve the issue of raw materials security, provides predictable pricing for raw materials and achieves the goal of import substitution set by the Russian Government. Despite positive trends in import substitution, RUSALs demand for aluminium fluoride still significantly exceeds Russian producers’ production capacities. Both companies are currently discussing further expanding this cooperation, including by doubling production of aluminium fluoride.”

PhosAgro CEO Andrey Guryev said, “In addition to making our mineral fertilizer production capacity more competitive thanks to deeper processing of phosphate rock, PhosAgro will become the leading mineral fertilizer producer by share of fluoride in phosphate raw materials, and in terms of aluminium fluoride production.”

*Aluminium fluoride is used as a component in aluminium production