Aluminum World Market Stays Attractive: RuSal To Expand Production Facilities.

RuSal will invest USD 36.7 mln to upgrade Mykolayiv Alumina Plant in 2006. In addition, the Russian aluminum producer, which possesses 10% of the world primary aluminum market, plans to construct a plant in Australia. This project will cost RuSal ~ USD 3 bln. Presently, the company is negotiating with electricity and bauxites producers to solve supply issues. Concorde Capital: The global aluminum market seems to be bullish due to a shortage of world supply and growing demand. The prices forecasted by LME Barclays, Man Financial, Societe Generale vary from USD 1800 to USD 1900 in 2006 and do not show any signs of decline. RuSal’s ambitious investment program supports our beliefs about the market. As for the main Ukrainian producer of primary aluminum Zaporizhzhya Aluminum Plant (ZALK: BUY) we believe that it business is at peak levels right now and will remain so in the mid-term. We believe the government will set lower electricity tariffs for ZALK in the mid-term which we expect will bring back ZALK’s positive margins.