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. Last Updated: 07/27/2016

RusAl Seeks to Diversify Its Business

LONDON -- United Company RusAl, the world's largest aluminum producer, may expand into other businesses to reduce its reliance on the lightweight metal whose price has fallen this year, Artyom Volynets, the company's head of strategy, said Monday.

The firm is considering adding other products traded on the London Metal Exchange, Volynets said. He said no decision had been made on which metal or when an investment would be made.

"Sooner or later we'll have to diversify," Volynets said. "Clearly it would be good to be in all metals traded on the LME. Which metals exactly, will depend on the particular opportunity."

Diversification would allow RusAl, owned by Oleg Deripaska and Viktor Vekselberg, to compete better with rivals such as BHP Billiton and Xstrata in exporting to China. Aluminum for delivery in three months has fallen 7.7 percent this year, making it the exchange's second-worst performer after zinc.

Once a company dominates a market, anti-monopoly rules tend to curb its ability to expand, Volynets said. Spreading the business risk reduces the volatility of a company's cash flow, he said.

RusAl was the "best placed" Russian company to consolidate other businesses because it has assets in 17 countries, including some in "challenging environments," Volynets said.

"We're already operating like a diversified company," he said.

Plants will be built in countries including Indonesia, Venezuela and Russia to help meet demand, Volynets said. The list includes a $7 billion aluminum and nuclear power project in Russia,and another venture to complete a Soviet-era dam and hydropower plant that will power a nearby smelter.