Rusal chief executive officer and CEO of United Company Rusal, Alexander Bulygin (left), SUAL's main owner Viktor Vekselberg (centre) and RUSAL owner Oleg Deripaska at a September 2006 news conference in Moscow. - Reuters

Russia's aluminium billionaires yesterday said they would float the merged Rusal firm within three years as the country enhances its presence on global resources markets.

The new United Company RUSAL will produce one eighth of the world's aluminium, surpassing Alcoa Inc and Alcan Inc, by combining RUSAL, smaller Russian rival SUAL and assets of Swiss-based commodities trader Glencore.

Annual sales will be around US$12 billion.

"The deal is a proactive response to several significant industry trends: dynamic growth, competition to secure access to energy and raw material resources and active consolidation," said Alexander Bulygin, chief executive of the new company.

The new group's production capacity will be about four million tonnes of aluminium and 11 million tonnes of alumina, the firms said in a statement.

The former world aluminium leader Alcoa produced 3.55 million tonnes of the metal last year. Alcan produced 3.4 million tonnes.

The companies did not say where they intended to list United Company RUSAL. The firm's executives have said the listing could take place in London within 18 months of the merger.

RUSAL will own 66 per cent of the new company, SUAL 22 per cent and Glencore 12 per cent.

SUAL's main owner Viktor Vekselberg has been appointed non-executive chairman of the new company. Board members will include RUSAL owner Oleg Deripaska, SUAL shareholder Len Blavatnik and Glencore CEO Ivan Glasenberg.

Compete for global capital

U.S. citizen Blavatnik, whose Access Industries company owns 30.13 per cent of SUAL, said in a separate statement the merger would ensure "the ability to compete successfully for global capital, customers and assets".

SUAL President Brian Gilbertson, once tipped to be chairman of the new company, was not named among the board members in the statement. Russian media have reported that he would leave the company after the merger.

"There is nothing out of the ordinary in Gilbertson leaving, as he was appointed to head an independent SUAL, which had planned its own IPO," Alfa-Bank's analyst Vladimir Zhukov said.

"And there is also nothing extraordinary in the company's board chaired by one of the company's owners, who is a very well-known figure."

The board will include two independent non-executive directors. A third independent non-executive director will be appointed by July 1.

United Company RUSAL combines four bauxite mines, 10 alumina refineries, 14 aluminium smelters and three foil mills. The company's assets and over 100,000 employees are located in 17 countries.

The company also owns bauxite reserves and has access to a significant energy base, the statement said.

- Reuters