RUSAL, one of the world’s leading aluminium producers, reported today substantial organic growth across its main product lines in the first half of 2004.

Primary aluminium production grew by a total of 5.1%, while production of bauxite and alumina increased 5.9% and 5.7% respectively, year over year. Value added casthouse production achieved the most dramatic growth with an increase of 24.6% year over year. During the same time period, the share of alloys alone increased 63.6%. These results reflect the company's new market-driven strategy, which was launched with a strong orientation to end-consumers needs and development technologies.

«We are seeing strong progress on all our main strategic objectives — overall growth, increased production of premium alloys, enhanced self-sufficiency in raw materials and improved productivity,» RUSAL Chief Executive Alexander Bulygin said. «These all involve complex challenges. By pursuing them in a balanced and realistic way, we are turning RUSAL into a much stronger company, capable of competing globally.»

Organic growth of primary aluminium production at all of the company's smelters was achieved by improvements in amperage and current efficiency increases as well as optimization of production technology, executed by RUSAL's Engineering and Technological Center.

Higher productivity and better utilization of technological equipment secured organic bauxite and alumina production growth at the Compagnie de Bauxite de Kindia and Friguia. The Nikolaev alumina refinery's capacity was increased by 10.7% to 1 300 000 tonnes mainly as a result of its modernization program. The modernization program will continue next with the Achnisk refinery and is expected to result in further production growth. The Achnisk plant, together with VAMI, is preparing a feasibility study designed to increase the plant's capacity to 1 200 000 tonnes. The study is scheduled to be completed by the end of 2004.

RUSAL's program to raise its share of value added casthouse products has been implemented at all the company's smelters with the installation of new equipment and updated machinery. Production operations of high quality extrusion ingot on the basis of the Hydro technology started at the newly upgraded casthouse at Sayanogorsk. Production of alloys of 380 in small ingots started at the Bratsk smelter at the beginning of the year. Casting complex capable of producing 35 000 tonnes of foundry alloys per year was introduced at the Krasnoyarsk smelter in March. The testing production of piston alloys continues at the Novokuznetsk smelter.

Exports of value added casthouse products increased by 27% year over year, with North America and Asia as the main regions of growth. In North America and Asia, RUSAL's exports increased by 96% and 53% respectively year over year. Asian growth prompted RUSAL's expansion of its global sales network through the establishment of new sales offices for RUSAL in Singapore and Tokyo. These offices complement the existing RUSAL locations in New York and D?sseldorf.

Significant growth of beverage can output was the result of the start-up of the ROSTAR-Vsevolzhsk can plant.

RUSAL's revenues for the first half of 2004 rose to $2.6 bln (H1 2003 — $2.1 bln) due to a sharp increase in LME aluminium price and continued production growth. For the full year 2003, revenues totalled $4.5 bln.

The financial debt amounted to $2.3 billion as of 30 June 2004, unchanged from the beginning of 2004.

All figures are unaudited and prepared in accordance with US GAAP.

Other highlights for 1H of 2004 included:

• RUSAL changed its corporate structure with the formation of two new divisions — the Alumina and Aluminium Divisions, to manage its raw material and metal assets. These divisions are in addition to the company's existing Packaging, Mill Products, Can and Extruder Divisions.
• A feasibility study for the construction of a new aluminium smelter started in the Irkutsk region. Bechtel Corporation, the U.S.-based global engineering and construction company, is carrying out the study.
• RUSAL commenced a detailed feasibility study on the expansion and modernisation of its Friguia Alumina Refinery (Guinea). The Canadian engineering company Hatch Associates is conducting the feasibility study in collaboration with VAMI (All-Russia Aluminium and Magnesium Institute).
• RUSAL installed a new colouring line in its MOSMEK construction profiles plant. The new line, currently being brought into operation, cost $1.6 mln. and is designed to colour 1.5 mln. square meters of profile surface per year.
• At Friguia, there was the exploration of the powerful Canadian mining machine Wertgen-200 with a capacity 960,000 annually.
• The proposed Alcoa-RUSAL transaction concerning the acquisition of Samara and Belaya Kalitva Metallurgical Plants is still awaiting regulatory approvals.
• Krasnoyarsk Aluminium Smelter and Bratsk Aluminium Smelter have received the ISO 14001 environmental management system certification.

(1) Decrease in foil and flat rolled products were due to suspending for modernization of ARMENAL foil mill and as result output reduction at the Samara Metallurgical plant, working in the same production chain.

(2)The sharp increase in can production was due to the start up of the new ROSTAR-Vsevolzhsk can plant, launched in February 2004.

About RUSAL

RUSAL (www.rusal.ru) is the third largest primary aluminium producer in the world, formed in March 2000 from the merger of a number of the largest smelters and other aluminium producers located in the CIS. The Company accounts for 75% of Russia's primary aluminium output and 10% of the global primary aluminium output. RUSAL is a fully vertically integrated company with a complete production cycle from bauxite mining and the production of raw materials, to the production of primary metal, semi-products and aluminium-based end products. RUSAL is headquartered in Moscow.

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