Rusal is seeking to pour $200 million in Kentucky-based Braidy Industries, the Russian aluminum giant’s first investment in the country since resolving a sanctions dispute with the Trump administration.
Under the terms of the 10-year agreement with controlling company En+ Group, Rusal will be Braidy’s sole-source provider of low-carbon aluminum for its new $1.6 billion rolling mill slated to open in 2020 in northeast Kentucky, the firms said on Monday. The investment will give Rusal a 40 percent share in the facility and En+ Group Executive Chairman Lord Gregory Barker will serve as co-chairman of the new mill alongside Braidy CEO Craig Bouchard.
The aluminum industry is racing to lower the amount of carbon emitted in the production process. Alongside Rusal’s efforts, Pittsburgh-based Alcoa Corp., Apple Inc. and Rio Tinto Group are developing a process that would rid carbon from the smelting process, replacing it with oxygen emissions. For Braidy, Rusal was the only supplier that could provide the necessary 200,000 tons of low-carbon slab a year, according to Bouchard.
“When you combine low-cost, highest-quality [and] lowest carbon imprint, that turns into a competitive advantage. There is no other company that will be able to do what we are doing,” he told FOX Business.
It’s also a coup for the firm that is in the midst of trying to raise the $1.7 billion needed for construction of the facility. Last month, Braidy again extended the deadline for a sale of its stock to June 15 due to the pending Rusal investment, which was not disclosed at the time of the announcement. The company has also received a direct $15 million investment from Kentucky.
And for Rusal, the world’s second-largest aluminum producer, the deal is the first of what the firm hopes is a long list of other partnerships with American companies.
“The U.S. is where the growth is going to be in the future,” said Barker. “We see a renaissance in U.S. added-value manufacturing, advanced manufacturing.”
The deal requires board approval from both companies, expected by early summer.
The announcement comes months after En+ Group and Rusal reached an agreement with the Treasury Department to lift sanctions on the Russian company after it removed founder Oleg Deripaska – a close ally of President Vladimir Putin -- and reduced his stake in the firms.
The two companies also agreed to “unprecedented transparency,” including ongoing auditing and new reporting requirements, the agency said in a January statement. After the announcement, En+ Group also overhauled its leadership to include more independent directors on its board.