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. Last Updated: 07/27/2016

RusAl Will Be ‘Cautious’ on Expansion

Oleg Deripaska said Wednesday that RusAl will be “very cautious” on investing outside Russia as oversupply may extend for another three to four years.

The company already has enough bauxite, which is refined into a powder to make aluminum, to supply its plants for 300 years, Deripaska said. The company sources 30 percent of its bauxite in Russia, he added.

“The aluminum market is under the stress of oversupply because of high expectations of rapid growth that developed in recent years,” Deripaska said. “We may see the situation continuing in the next three, four years.”

A five-year expansion by RusAl into Australia, Africa and Latin America and the purchase of 25 percent of Norilsk Nickel saddled the firm with more than $16 billion of debt. RusAl may reach an accord to extend repayment on $4.5 billion of the borrowings next week with VEB bank, Deripaska said.

RusAl has cut $600 million in costs since October 2008 and shut 10 percent of its capacity to repay debt. Aluminum has rebounded 23 percent in London so far in 2009 to $1,888 a ton after slumping 45 percent in the prior two years.

Deripaska expects the company to focus on expanding capacity in Siberia and sell more aluminum to the emerging economies of India and China, he said. “India is a very modern market that will come into the arena in the next two years,” Deripaska said.