Rusal wants to forge aluminium merger

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Is there a golden future for this metal-basher?

Russian Aluminium, the second largest supplier of aluminium in the world, is eyeing a $4bn (£2.7bn) deal to merge with the aluminium assets of two British mining giants, Rio Tinto and BHP Billiton.

Known as Rusal, the Russian group wants to expand its aluminium assets, particularly in the mining of bauxite, the raw ingredient for producing the metal.

Rusal's chief operating officer, Alexander Boulygine, told The Independent on Sunday he was interested in a deal with a Western partner. His four targets are the two UK mining companies; Kaiser Aluminium, a US company restructuring via Chapter 11 bankruptcy proceedings; and Nalco, India's second largest aluminium maker. Mr Boulygine wants to forge a joint venture partner with their aluminium assets, or buy them outright. He is also planning to offer them the chance of buying a strategic stake in Rusal.

BHP and Rio Tinto own bauxite mines and aluminium smelters around the world. BHP Aluminium has assets in South Africa and Brazil, and Rio Tinto has assets in Guinea, Europe and Australia.

Rusal says it is adopting Western financial and corporate governance standards to prepare for an international flotation in two years. The company also intends to launch a Eurobond issue of up to $300m this year.

Rusal also faces a $2.7bn New York lawsuit claiming the company and its chairman, Oleg Deripaska, were involved in "murder, bribery, extortion, mail and wire fraud, and money-laundering". Rusal strenuously denies this. A ruling is expected this year.

A Rio Tinto spokesperson said: "We are the sort of company interested in looking at all sorts of opportunities." BHP declined to comment.