Russian Aluminum Producer Rusal to Invest in Kentucky Mill

The rolling mill will have an annual capacity of 500,000 tons of hot rolled band and 300,000 tons of fully finished cold rolled products. The new mill will offer a broad array of aluminum auto sheet thicknesses as well as 92-inch width coil. Current plans for production include:

• 200,000 tons of series 6000 auto body sheet
• 100,000 tons of series 5000 sheet
• 70,000 tons of series 7000 aerospace plate

The Braidy plant will be the largest U.S. aluminum mill project in 35 years. The 2.5 million-square-foot, fully-integrated aluminum rolling mill will be built on 300 acres with access to CSX rail and barges on the Ohio River. The mill will be built using a “green” plant design to eliminate emissions. Equipment for the mill will be purchased from SMS Group and Austria-based Ebner Group. Start-up of the new mill is expected in 2020.

Braidy Industries is working to attract investors for the project, seeking $500 million in private investment to augment low-interest financing from the U.S. Energy Department and tax incentives from the Kentucky Economic Development Finance Authority.

Rusal will supply about 200,000 metric tons of aluminum to the Kentucky plant annually for the next 10 years. Last year, the Trump administration placed a 10 percent tariff on imports of aluminum under Section 232. Rusal and Braidy say they will pay the tariff. Scale of production and higher aluminum pricing in the U.S, as a result of the tariffs, is expected to help mitigate the additional cost. 

Rusal and parent EN+ Group were under U.S. sanction by the Treasury Department until this past January in retribution for meddling in the 2016 elections. The sanctions were lifted after Russian oligarch Oleg Deripaska, tied to Trump’s former campaign chairman Paul Manafort and Russian President Vladimir Putin, agreed to surrender majority ownership of En+.

Braidy Industries CEO Craig Bouchard told CNBC on Monday he is not concerned about the past sanctions or the possibility of any future ones.

“To be quite frank, Rusal is the lowest carbon producer of high-quality aluminum in the world,” said Bouchard. “We need that aluminum in our furnaces so that we can produce the highest quality aluminum in our industry. So, they are the perfect partner.”

Bouchard said he expects that Rusal, “a great company,” will be welcomed in America. “Rusal will come out of this as the superstar company in our industry.”