Wikipedia

En+ Group

En+ Group plc is a green energy and metals company. It has a controlling stake in Rusal, one of the world's largest aluminum producers outside of China.[1] EN+ was founded by Oleg Deripaska[2]

En+ Group plc
Company typePublic limited company
LSE: ENPL
MCX: ENPG
Industryenergy and metals
Founded2002 (2002) (Moscow)
HeadquartersMoscow, Russia
(Head office)
Kaliningrad, Russia
(Registered office)
Number of locations
3
Key people
Vladimir Kolmogorov (CEO)
Revenue$10.36 billion (2020)
$1.86 billion (2020)
Number of employees
Approximately 90,000 (2022)
Websitewww.enplusgroup.com/en/

By using hydroelectricity to power its smelters, EN+ Group’s manufacturing process generates 80% less emissions than coal-burning manufacturers in China.[1] The company has set ambitious goals for achieving net-zero emissions[3] in the production of “green aluminum."[4] The company is the world's largest independent hydropower generator.[citation needed]

EN+ is led by Vladimir Kolmogorov.[5] In 2020, the company reported revenues of $10.36 billion and a net income of $1.86 billion.[6] It is publicly traded and listed on the London Stock Exchange.[1]

History

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2002: En+ Group established.

2003: RUSAL Holding Limited established following a corporate restructuring and consolidation of aluminium and alumina assets. These assets would later form the group of companies that now compose UC RUSAL. The consolidation of RUSAL Holding Limited was completed in 2004, 100% of its shares were transferred to En+ Group.[7]

2001 – 2007: The Group acquired 50.2% of the shares of Irkutskenergo, a power company that owns the Irkutsk, Bratsk and Ust-Ilimsk HPPs and several CHPs in the Irkutsk region of Russia, with an aggregate generation capacity of 12.8 GW. In 2016 the Group increased its shareholding to 90.8%.[8]

2005: purchase of Aluminium Plant Podgorica by subsidiary Salomon Enterprises Limited, which was later renamed Central European Aluminum Company (CEAC)[9]

2007: Following the acquisitions of SUAL Group by En+ Group, which at the time was one of the ten largest aluminium producers globally, and select aluminium and alumina businesses from Glencore, the current RUSAL was formed under UC RUSAL.[10]

2008: UC RUSAL completes the acquisition of a 25% + 1 shares stake in Norilsk Nickel, the world's second largest producer of Nickel and one of the world's leading producers of platinum and copper.[11]

2010: UC UC RUSAL conducts initial public offering of shares and depositary receipts in Hong Kong.[12]

2011: En+ establishes En+ logistics, to provide logistics services predominantly to its Energy Segment.[13]

2013: As relationship between the CEAC and the Government of Montenegro became increasingly sour, there was an ongoing debate within the country about the fate of the aluminum producer. The size of the company, number of employees, and its impact on the Montenegrin trade balance imply that efforts will be made by the Government to keep the company alive, although sustainable ownership and management arrangements are yet to be made given the recriminations. On 8 July 2013, the CEAC officially went bankrupt, having up to that point accumulated a debt of 383 million euros, while the company itself is worth 180 million euros.[14]

2014: Boguchansk HPP initiated operations (as part of the BEMO 50/50 joint venture between UC RUSAL and RusHydro).[15]

2016: The first half of the first stage of the Boguchansk aluminium smelter (as part of the BEMO 50/50 joint venture between UC RUSAL and RusHydro) began operations with a production capacity of 149 thousand tonnes.[16]

2017: En+ successfully lists on the London Stock Exchange, raising $1.5 billion from international investors, valuing the company at $8 billion. The IPO was largest Russian IPO globally since 2012 and the first IPO by a Russian company in London since 2014.[17]

2021: En+ Group’s Metals segment RUSAL announced its proposal to demerge its high carbon assets and to change its name to AL+.[18] Mubadala, a state-owned investment company in Abu Dhabi, purchased a 2.6% stake in En+ Group from Polina Yumasheva, the former wife of Oleg Deripaska.[19]

US sanctions on En+ Group

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In April 2018, the United States Treasury Department's Office of Foreign Assets Control (OFAC) included En+ Group among a list of 38 Russian entities being sanctioned in response to Russian interference in U.S. elections, violence in Ukraine, cybercrimes, and supplying Syria with weapons.[20] Both EN+ Group and RUSAL were included on the list for being owned or controlled by Oleg Deripaska, who was also among the sanctioned entities.

As a result of the sanctions, the U.S. government froze all US assets of EN+ Group and prohibited U.S. persons from doing business with the company.[20]

In response, the chairman of the board of directors of EN+ Group, Rt Hon The Lord Barker of Battle presented a plan[21] aimed at the de-listing of the company from the sanctions’ list by reducing Deripaska’s shareholding interest and creating an independent board of directors.[22] On April 27, the company completed a regulatory filing with the London Stock Exchange stating the Deripaska had agreed to leave the board and reduce his ownership interest to less than 50%.[23]

On May 1, 2018 the US Department of the Treasury loosened the sanctions to allow transactions necessary to divest or transfer debt, equity or other holdings in EN+ Group and United Company RUSAL PLC.[24] The following month, four board members, Gulzhan Moldazhanova, Igor Makarov, Olga Mashkovskaya and Anton Vishnevskiy, resigned as part of the Barker restructuring plan.[25]

On July 21, 2018 US Treasury Secretary Steven Mnuchin said in an interview that the objective was not to put the company out of business, but to limit Oleg Deripaska.[26]

The US Treasury notified Congress about its intention to lift sanctions against En+ Group in December of 2018 following the corporate restructuring.[27] In the announcement lifting the sanctions, Mnuchin said “These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” and noted that the companies would be subject to ongoing compliance and regulation.”[21]

Under the arrangement to lift U.S. sanctions, new independent directors would be appointed to the boards EN+ and Rusal and the companies agreed to not act in any manner that “directly or indirectly provides Deripaska with the ability to exercise a controlling influence over management or policies” of EN+ or Rusal.” Deripaska’s voting interests were reduced to 35%.[28] When Barker announced the agreement in January of 2019, he acknowledged it wasn’t perfect. “I am not pretending that Deripaska is removed from the company altogether, but we have removed control."[21]

After sanctions were lifted for En+ Group, Deripaska remained on the OFAC list. All of Deripaska’s property and interests in property, including entities in which he holds a fifty percent or greater interest, remained blocked and he was prevented from obtaining cash either in return for his shares or from future dividends issued by En+ or Rusal.[29]

Demerger of RUSAL

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EN+’s RUSAL business unit announced a plan in May 2021 to split itself into two companies, separating its high-carbon products from its low-carbon products. The low-carbon company will be called AL+ and was expected to keep 60% of its aluminum production and 70% of its alumina production assets.[30] The high carbon assets will include five aluminum smelters, fours alumina refineries, and two bauxite mines.[31]

The move to demerge the company’s high and low carbon producing assets was part of a larger plan to reach net-zero carbon emissions by 2050.[32] The net-zero plan, announced in January 2021, would reduce the company’s greenhouse gas emissions by 35% by 2030 and put EN+ in compliance with the Paris Agreement and the European Green Deal. Chief operating officer Vyacheslav Solomin leads the company’s Climate Change Taskforce.[33]

In late 2021, RUSAL opened the Taishet Aluminum Smelter, its first low-carbon aluminum facility.[34] The plant, located in Siberia, runs exclusively on hydropower and is expected to produce 428,000 metric tons of aluminum each year.[35]

Leadership and Governance

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In November 2018, Vladimir Kiryukhin was appointed as CEO of EN+ Group.[28] Kiryukhin’s predecessor, Vyacheslav Solomin, was named as COO.[36]

In January 2019, a new slate of board members was created consisting of twelve directors with a majority of independent directors. In addition to Chairman Lord Barker, the board has four board seats appointed by Deripaska[28] and eight independent directors: Christopher Burnham, Andrey Sharonov, Carl Hughes, Joan MacNaughton, Timur Valiev, Zhanna Fokina, Thurgood Marshall, Audrey Yanovsky, Vadim Geraskin, and Elena Nesvetaeva.[37]

Following Russia’s 2022 invasion of Ukraine, Barker resigned as chairman[38] along with Joan MacNaughton, a non-executive director.[39] Christopher Bancroft Burnham was appointed chairman in March 2022 to replace Barker.[40]

Sustainability

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In January 2021, En+ Group announced a significant emissions reduction target with plans to cut greenhouse gas (GHG) emissions by at least 35% by 2030.[41] The effort also set a goal of achieving net zero GHG emissions by 2050.[42] As part of this clean energy modernization effort, the company began replacing hydraulic units at its Bratsk hydropower plant. The work, which is expected to be completed by 2026, will reduce the group’s greenhouse gas emissions.[43]

Responding to a report that 67 percent of consumers favored carbon-labelling of products,[44] EN+ group chairman Lord Barker went on record suggesting that manufacturers of cans and containers made from green aluminum may respond by labeling the source of the raw material used to produce packaging for their products.[45] EN+ Group subsidiary Rusal signed an agreement in September 2021 with the UK’s Budweiser Brewing Group to produce five million ultra-low carbon beer cans. The cans will be 440ml in size and come from Rusal’s Krasnoyarsk plant in Siberia, which uses hydro-power as fuel.[46]

En+ Group signed an agreement in August 2021 with I-REC Services BV enabling the En+ Group to sell and redeem international renewable energy certificates (I-RECs).[47]

In the fall of 2021, EN+ participated in the United Nations Climate Change Conference (COP26).[48] Greg Barker, then chairman of EN+, attended the event along with eight other members of the EN+ management team.[49]

Metals

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En+ Group holds a 48.1% stake in RUSAL, a vertically-integrated aluminium producer. RUSAL accounted for approximately 6.2% of global aluminium output in 2017.[50]

En+ Group's Metals segment operates 10 aluminium smelters and 7 alumina refineries, with its core smelting operations located in Siberia. In addition, UC RUSAL holds a strategic investment in Norilsk Nickel and a 50% interest in the BEMO Project (a joint venture between UC RUSAL and RusHydro comprising Boguchansk HPP and Boguchansk aluminium smelter).[51]

In 2017 En+ Group's Metals segment produced 3,707 thousand tonnes of aluminium, 7,773 thousand tonnes of alumina and 11,645 thousand tonnes of bauxites.[52]

Rusal began producing a low-carbon aluminum brand called Allow in 2017. The material has been reported to have a carbon footprint of less than 8 tons of carbon dioxide per ton of aluminum produced. Rusal has targeted reducing Allow’s carbon footprint to a level of less than 2 tons of carbon dioxide per ton of aluminum.[53]

Key assets of the En+ Group Metals segment

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Aluminium smelters
Country Name Location Start of operations Annual production capacity, ktpa
  Russia Krasnoyarsk Aluminium Smelter Krasnoyarsk 1964 1019
  Russia Bratsk Aluminium Smelter Bratsk 1966 1008
  Russia Boguchansk Aluminium Smelter Taezhny town 2016 588
  Russia Irkutsk Aluminium Smelter Shelekhov 1962 529
  Russia Sayanogorsk Aluminium Smelter Sayanogorsk 1985 524
  Russia Novokuznetsk Aluminium Smelter Novokuznetsk 1943 322
  Russia Khakass Aluminum Smelter Sayanogorsk 2006 297
  Russia Volgograd Aluminium Smelter Volgograd 1959 168
  Russia Kandalaksha Aluminium Smelter Kandalaksha 1951 76
  Sweden Kubikenborg Sundsvall 1943 128
Alumina refineries
Country Name Location Start of operations Annual production capacity, mtpa
  Russia Achinsk Alumina Refinery Achinsk 1970 1,1
  Russia Bogoslovsk Aluminium Smelter Krasnoturyinsk 1944 1,052
  Russia Urals Aluminum Smelter Kamensk-Uralsky 1939 0,768
  Australia Queensland Alumina Ltd (20%) Gladstone 1967 4,058
  Ireland Aughinish Alumina Aughinish island 1983 1,990
  Jamaica Windalco Jamaica 1953 1,21
  Guinea Friguia Bauxite and Alumina Complex Fria 1960 0,65


Bauxite production sites
Country Name Location Start of operations Annual production capacity, ktpa
  Russia North Urals Bauxite Mine Severouralsk 1938 3,0
  Russia Timan Bauxite Ukhta 1992 3,2
  Guinea Compagnie des Bauxites de Kindia Kindia 1974 3,4
  Guinea Friguia Alumina Complex Fria 1960 2,1
  Guyana Bauxite Company of Guyana Inc Georgetown 2004 1,7

Energy

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En+ Group operates generating assets with 19.6 GW of installed electricity capacity. As of 31 December 2016, hydro power plants accounted for 76.6% (15.1 GW) of the Group's installed electricity capacity, which makes the Company the largest privately held hydro power generation company globally. As at 31 December 2016, the Group held an 8% share of the total installed electricity capacity in Russia.[54]

The Group's power assets are predominantly located in Siberia, where it has a 37.6% share of total installed electricity capacity in the region. The hydro power operations benefit from the abundant water resources of the Angara and Yenisei river cascades. These plants provide sustainable, low carbon and low-cost power for Russian industrial facilities, including Metals segment's core aluminium smelters. The Group believes that it benefits from lower operating costs compared to other hydro power generation companies in part due to the geographic location, scale and efficient management of the power generating assets.[55]

En+ Group's Energy segment is a member of the Global Sustainable Electricity Partnership, a non-profit organisation whose members are the world's leading electricity companies, supplying energy to over 1.2 billion customers.[56]

In 2017, En+ Group produced 68.4TWh of electricity and 26.7mn Gcal of heat.[57]

Key assets of the En+ Group Energy segment

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Hydropower plants
Country Name Location Start of operations Installed capacity, MW
  Russia Krasnoyarsk HPP Divnogorsk 1972 — 6000
  Russia Bratsk HPP Bratsk 1966 — 4500
  Russia Ust-Ilimsk HPP Ust-Ilimsk 1980 — 3840
  Russia Irkutsk HPP Irkutsk 1956 — 662
Combined heat plants
Country Name Location Start of operations Installed capacity, MW
  Russia CHP-10 Angarsk 1959 1100
  Russia CHP-9 Angarsk 1963 540
  Russia Novo-Irkutsk CHP Irkutsk 1975 708
  Russia Ust-Ilimsk CHP Ust-Ilimsk 1978 515
  Russia CHP-11 Usolye-Sibirskoye 1959 350
  Russia CHP-6 Bratsk 1965 270
  Russia Novo-Ziminskaya CHP Sayansk 1980 260
  Russia Avtozavodskaya CHP Nizhny Novgorod 1931 580

Renewables

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In 2015 En+ Group commenced the operations of the Abakan solar power plant. Its installed capacity is 5.2 MW, which makes it the largest solar power plant of Eastern Siberia.[58]

Key figures

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Financial data in USD billions
Year 9M2018 9M2017 FY2017 FY2016
Revenue 9,434 8,716 12,094 9,776
Adj. EBITDA 2,618 2,316 3,223 2,311
Net profit 1,623 898 1,403 1,361
Operational highlights
Measurement unit 9M2018 9M2017 FY2017 FY2016
Aluminium production Tonnes, 000 2,810 2,762 3,707 3,685
Primary aluminium and alloy sales Tonnes, 000 2,794 2,955 3,955 3,818
Alumina production Tonnes, 000 5,816 5,782 7,773 7,527
Bauxite production Tonnes, 000 10,128 8,701 11,645 12,187
Total electricity generation TWh 53,2 50,4 68,4 69,5
Total heat generation Gcal, 000 18,4 17,5 26,7 27,4

References

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  34. ^ "RUSAL opens new low-carbon aluminium smelter in Taishet". Aluminium International Today. Retrieved 19 May 2022.
  35. ^ "Rusal Opens New Low-Carbon Aluminium Smelter In Siberia". Aluminium Insider. 18 December 2021. Retrieved 19 May 2022.
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  37. ^ "Boardof Directors". EN+ Group. Retrieved 10 December 2021.
  38. ^ "Russian Aluminum Giant Weighs Asset Split as Chairman Resigns". news.bloomberglaw.com. Retrieved 19 May 2022.
  39. ^ "EN+ executive chair Greg Barker to step down". Financial Times. 7 March 2022. Retrieved 19 May 2022.
  40. ^ "EN+ Group Intnl PJSC Names Christopher Bancroft Burnham as Chairman". MarketWatch. Retrieved 19 May 2022.
  41. ^ "En+ Commits To Zero GHG Emissions By 2050". Aluminium Insider. 19 January 2021. Retrieved 27 July 2021.
  42. ^ "EN+ Group announces ambition to become net zero by 2050 - Climate Action". www.climateaction.org. Retrieved 27 July 2021.
  43. ^ "En+ Group to replace six units at 4.5-GW Bratsk hydropower plant". Hydro Review. 25 February 2021. Retrieved 21 September 2021.
  44. ^ "Consumers will demand ethically sourced drinks cans, says aluminium expert". Engineering & Technology. 31 August 2021. Retrieved 15 September 2021.
  45. ^ "Consumers to demand drinks cans should be ethically sourced, ex-minister says". The Independent. 30 August 2021. Retrieved 15 September 2021.
  46. ^ Hume, Neil (20 September 2021). "Rusal strikes deal to supply Budweiser with ultra low-carbon cans". www.ft.com. Retrieved 21 September 2021.
  47. ^ "En+ Group announces new partnership, in becoming full-cycle supplier…". Aluminium International Today. Retrieved 15 September 2021.
  48. ^ "En+ Group pre-COP26 reception". Aluminium International Today. Retrieved 19 May 2022.
  49. ^ "List of Participants" (PDF). United Nations Framework Convention on Climate Change; October 31 - November 12, 2021. United Nations: 191–197.
  50. ^ "RUSAL Annual report 2017" (PDF). Archived from the original (PDF) on 24 January 2019. Retrieved 24 January 2019.
  51. ^ "En+ Annual report 2017" (PDF).
  52. ^ "En+ 2017 Operational results" (PDF).
  53. ^ "The future of low-carbon aluminum". Recycling Today. Retrieved 19 May 2022.
  54. ^ "EN+ GROUP PLC ANNOUNCES INTENTION TO FLOAT ON THE LONDON STOCK EXCHANGE AND MOSCOW EXCHANGE" (PDF).
  55. ^ "Russia struggles to unleash clean energy potential". Financial Times. Retrieved 24 January 2019.
  56. ^ "EuroSibEnergo (ESE)". GSEP. Retrieved 24 January 2019.
  57. ^ "En+ 2017 Operational results" (PDF).
  58. ^ "Abakan launched the largest in Siberia solar power plant. · News · Tour Operator "Sayan Ring" - welcome to Siberia". www.sayanring.com. Retrieved 24 January 2019.
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