Rusal signs letter of intent to invest in Braidy Atlas

Rusal signs letter of intent to invest in Braidy Atlas

Rusal will obtain a 40 percent stake in the project in exchange.

Ashland, Kentucky-based Braidy Industries Inc. and Russia-based En+ Group PLC have announced the execution of a letter of intent (LOI) specifying basic terms for a potential $200 million lead investment for its Braidy Atlas mill by En+ Group subsidiary, United Company Rusal PLC.

En+ Group is a leading international vertically integrated aluminum and hydropower producer. The company’s power plants have a total installed capacity of 19.5 gigawatts, including 15.1 gigawatts of hydropower assets, and 3.9 million metric tons of annual aluminum production capacity through a controlling stake in UC Rusal PLC, the world’s largest aluminum producer outside of China in 2018, which is the major consumer of En+ Group’s hydroelectricity. Rusal historically has been the U.S.’ No. 2 nondomestic supplier of prime aluminum.

The LOI will become binding after the approval of both companies’ boards. In exchange for its investment, Rusal will obtain a 40 percent share in the project, which plans to construct a greenfield aluminum rolling mill to serve the automotive and aerospace industries. Rusal will serve as Braidy’s exclusive supplier of low-carbon aluminum, providing roughly 2 million metric tons over 10 years, according to a news release issue by Braidy. This will be the world’s largest order for one mill of high-quality, prealloyed and low-carbon primary aluminum slabs. Braidy Atlas mill’s primary aluminum purchase has a market value of approximately $500 million per year, according to the company.

En+ Group Executive Chairman Lord Gregory Barker will assume the role of co-chairman of the Braidy Atlas mill alongside Braidy Industries Chairman and CEO Craig Bouchard.

Braidy Atlas will be the first North American company to contract Rusal’s ALLOW-branded (certified low-carbon) aluminum slabs and P1020 as its exclusive primary inputs. No U.S. domestic smelter currently delivers low-carbon primary aluminum slabs, Braidy says. Rusal is the sole primary aluminum producer globally that is capable of meeting Braidy’s quantity requirements and sustainability standards.

“In 2021, Braidy Atlas will make the largest order for primary aluminum rolling slab worldwide,” Bouchard says. “This partnership assures that Braidy's requirements will be met with the newest high-quality and low-carbon capacity. The bottom line is that without Rusal, we could not build an environmentally conscious mill of this scale. We enter the market with the perfect customer proposition—low cost, high quality and low carbon is the future of aluminum.”

Jorge Vazquez, founder and managing director of Harbor Aluminum Intelligence, Austin, Texas, one of the world's leading aluminum industry consultancies, says, “The 10-year supply contract between Braidy Atlas and Rusal represents the world's largest low-carbon primary aluminum slab order for a single mill. The contract will enable Braidy Atlas to have a competitive advantage in terms of cost, quality and sustainability while providing a market value of over $5 billion to Rusal.”

Barker says, “This announcement is an important first step in forging the long-term partnership that will be vital to building this globally unique plant. Of all prime producers around the world, only Rusal, the largest outside China, has the capacity to supply such a large new plant with the high-quality, low-carbon aluminum it needs.”

Kevin Parker, the independent nonexecutive director of UC Rusal, adds, “This deal showcases Rusal’s commitment to sustainability and environmental protection. The synergies created by Rusal’s low-carbon aluminum and Braidy Industries’ downstream assets will be a game-changer for the aluminum industry in the United States."

Briady expects to invest $1.6 billion to build the melting and rolling mill in Kentucky, with scrap factoring into the company's production inputs. 

Braidy Atlas President Thomas Modrowski told Recycling Today in a Q&A about the proposed mill that the company is "on a constant quest to identify the highest quality, lowest cost metallic inputs" for the plant. "We intend to be the leader in closed-loop recycling with automotive customers."

He added that that company's technical team has been working on technologies that have the potential to refine various scrap sources.