UC RUSAL and PhosAgro sign long-term supply agreement

UC RUSAL, the world’s largest aluminium producer, and PhosAgro, a leading global vertically integrated phosphate-based fertilizer producer, announce an agreement for the supply of fluoric salts until 2034.

The parties have signed a long-term agreement with the aim of further modernising PhosAgro subsidiary Ammophos in Cherepovets (Vologda Region) and increasing the supply of fluoric salt to RUSAL's plants.

PhosAgro currently supplies 23 thousand tons of aluminium trifluoride per year to RUSAL. In the period 2012-2015, PhosAgro plans to invest RUB 2.2 billion with the aim of increasing production at Ammophos by 12 thousand tons per year. Increased production and supplies of fluoric salts to RUSAL are planned from the middle of 2015, and are expected to reach 35 thousand tons per year in 2016.

Prices will be determined by a formula that includes an investment component. The parties are also considering implementing a similar arrangement at PhosAgro subsidiary Balakovo Mineral Fertilizers in Balakovo (Saratov Region).

The supply agreement with RUSAL guarantees PhosAgro long-term sales of fluoric salts, and will allow the company to invest in expanding its production capacities and enhance the environmental security of Ammophos.

"PhosAgro is a valued and reliable supplier and we are pleased to confirm formally our partnership in this way,” RUSAL Commercial Director Pavel Ovchinnikov said. "Additional volumes of fluoric salts from PhosAgro will provide security of supply for RUSAL and guarantee world-class fluoric salts for the aluminium smelters we are currently building at Boguchany and Taishet.”

PhosAgro CEO Maxim Volkov said: “We greatly value our relationship with RUSAL, and are delighted that today's agreement not only secures a long-term future for the supply of fluoric salts, but also gives us the ability to invest and expand our production capacities and achieve a guaranteed return on our investment. Furthermore, this agreement will enhance profitability and increase the breadth and depth of uses for components of apatite concentrate, helping us to plan for the future on a long-term basis.”