US and Nigeria move against UC Rusal

UC Rusal, the Russian aluminium producer, is being sued in Nigeria and the US for abuse of the privatisation process that resulted in the company acquiring Alscon, a Nigerian aluminium smelting company, in 2004.

In a recent turn of events, US officials have come out in support of Bancorp Financial Investment Group (BFIG), the company bringing the case against Rusal.

BFIG maintains that Rusal has violated Nigerian privatisation law and regulations and failed to meet its commitments at Alscon.

Nigeria’s recently elected president, Umaru Yar’Adua, has undertaken a review of the privatisation agreement made by his predecessor and at the same time, major US corporations (Alcoa and General Electric are reported to be among their number) have been arguing for US State Department support to reopen Nigerian resources to a fresh round of bidding.

Rusal acquired Alscon for $250 million, which analysts estimate was around one-third of its value.

The Nigerian House of Representatives and Senate is considering cancelling the privatisation and reinstating BFIG’s bid, which was for $410 million.

Meanwhile, Century Aluminum has announced that its subsidiary, Nordural Grundartangi ehf, has completed the energising of all of the cells for its most recent 40,000 tonne expansion project at its primary aluminum smelter at Grundartangi, Iceland.

In October of 2006, the company expanded capacity at the plant from 90,000 tonnes to 220,000 tonnes and the latest scheme takes rated capacity to 260,000 tonnes.