Russian aluminium company Rusal has closed a deal to acquire a majority stake in the Aluminium Smelter Company of Nigeria (Alscon) in Akwa Ibom from the Nigerian Bureau of Public Enterprises (BPE). The transaction will add almost 150,000 tonnes annually to Rusal’s aluminium production capacity.


Rusal has received a 77.5% block of shares in Alscon, a 193,000-tonne smelter (reduction, anode-producing and casthouse areas), a port on the Imo River and a power-generating station. Germany’s Ferrostaal and the government of Nigeria remain minority shareholders with 7.5% and 15% blocks respectively.


The terms of the deal include the dredging of the Imo River necessary to create the transport infrastructure.


Rusal plans to invest an additional US$150mn over the next three years to complete, refurbish and modernise Alscon. The purchase is partly funded through a US$60mn loan that can be increased up to US$130mn. The loan was secured by Rusal in 2007. The smelter should go online by the end of this year.


In West Africa Rusal already operates the bauxite mining complex Compagnie des Bauxites de Kindia and Frigiua Bauxite and Alumina Complex in Guinea. The addition of Alscon completes Rusal’s output cycle in West Africa, allowing it to boost production efficiency.


Aluminium fabricated at Alscon will be sold to Rusal’s current and potential clients worldwide.


Rusal is the world’s third largest primary aluminium producer, providing primary aluminium and value-added casthouse products to customers in 50 countries. Headquartered in Moscow, with operations in nine regions of Russia and 14 countries globally, Rusal now accounts for 75% of aluminium production in Russia and 10% internationally.


Alscon produced its first metal in 1997, before being fully completed. Installed to date are about 75% of the projected reduction cells. Its output during the short period of operations in totalled 40,000 tonnes of aluminium.


In 2000 the smelter was brought to a standstill with high production costs, inadequate gas supply, complicated marine access and lack of working capital cited as the main reasons. Once fully operational, the smelter can provide jobs to 1,800 people.