RUSAL and FGC UES sign a production agreement for new power cables

On 18 June 2010 UC RUSAL (HKSE 486, Euronext RUSAL/RUAL), the world's largest producer of aluminium and the Federal Grid Company of the Unified Energy System, the operator of Russia's national grid, announce that they have signed an agreement to manufacture new types of cables for overhead power transmission lines.

The agreement was signed as part of the investment and innovation programmes currently being implemented by the two companies. The cooperation between the companies is aimed at creating production capacity in Russia to manufacture modern types of cables for power transmission lines, which will improve their reliability and capacity. The parties intend to begin manufacturing high-temperature cables, cables with improved aerodynamic characteristics and vibration resistant self-damping cables from aluminium and aluminium alloys, capable of withstanding the impacts of the elements, in particular wind and ice. The use of the new cables will help prevent power outages during unfavourable weather conditions.

At present these types of wire are widely used abroad in power transmission lines in regions with difficult weather conditions, however, they are not produced in Russia. The use of these new types of wire to build and modernise power transmission lines in Russia will drastically improve the reliability and economic efficiency of the country's power grid, significantly reducing the probability of power outages.

According to the agreement signed by the parties, RUSAL will participate in the building of a plant to make the new types of cables and accessories associated with them. It is expected that the new factory will be put into operation in the second half of 2011.

The role of FGC UES will be to enter into a long term contract to buy equipment from the new factory in accordance with FGC's demand, and then help develop the new factory further as FGC implements a modernisation programmes at its facilities.

Vladislav Soloviev, the first deputy CEO of UC RUSAL notes, “One of our top priorities is the development of the domestic market. We believe that Russia can use a lot more aluminium and aluminium alloys than it is currently using in strategic industries. We are sure that this joint project of UC RUSAL and FGC UES will exemplify mutually beneficial cooperation between a manufacturer and an end consumer of its products and will provide a powerful impetus for the creation of new high-tech production facilities in Russia, increasing sales of aluminium in the domestic market while at the same time, providing modern equipment that will significantly improve the reliability of the country's power grid, something that all electricity consumers will benefit from”.

Oleg Budarguin, the Chairman of the executive board of FGC UES said: “The modernisation and innovative development of Russia's power grid requires that modern electrical equipment, technologies and materials should be introduced on a large scale. We're interested in developing the electrical engineering industry in Russia, both by localising the manufacture of the world's best equipment and by creating and introducing Russian technologies. The implementation of the new project with RUSAL which involves the creation in Russia of a production complex for making modern types of wire will allow Russia's power grid to significantly increase the reliability and economic efficiency of its systems”.