RUSAL to buy 33% of Shenzhen North Investments

HONG KONG - United Company RUSAL Ltd said on Wednesday that it plans to buy a 33 percent stake in a Chinese aluminium trader to enhance sales and strengthen its market position in China, the world's largest user of the lightweight metal.

RUSAL, the world's top aluminium maker by output, had agreed to buy the stake in Shenzhen North Investments Corp Ltd controlled by state-owned China North Industries Corp, it said in a filing to the Hong Kong stock exchange.

The company did not disclose any investment terms, but said Shenzhen North Investments was a metals trader with more than 15 years of experience.

RUSAL, whose largest shareholder is Russian billionaire Oleg Deripaska, told Reuters in March that it planned to secure between five and eight major Chinese buyers on long-term contracts to carve a larger share of the China market.

The company said China had become a net importer of aluminium, importing 38 thousand tons since January 2010, and it forecast that China would increase imports of primary aluminium in 2011 to 3-4 million tons by 2015.

RUSAL said it and NORINCO would sign a memorandum of understanding to set up a joint venture in China to make and sell aluminium alloys, including semi-finished parts for production of aluminium cans, slabs and billets for production of aluminium profiles, and wheel alloys.

The Russian company would hold at least 51 percent of the joint venture company, it added.

RUSAL said it would continue to supply primary aluminium to NORINCO and would consider the possibility of increasing sales to China when market conditions become more favourable.

The company struck a deal in November 2009 to sell 1.68 million tons of aluminium to NORINCO over seven years.