ASHLAND, Ky. (KT) – Braidy Industries, Inc., may be having its greatest day Monday.
A letter of intent outlining basic terms for a $200 million lead investment for its Braidy Atlas mill is officially in the works with United Co. Rusal, a Russian aluminum giant and one of the world’s largest producers of aluminum outside of China.
The letter of intent becomes binding upon approval from the boards of both companies.
In exchange for its investment, Rusal will obtain a 40% share in the project and serve as Braidy’s exclusive supplier of low-carbon aluminum, providing close to 2 million metric tons over 10 years. It will be the world's largest order of high-quality, pre-alloyed and low-carbon primary aluminum slabs for one mill.
Braidy Atlas mill’s primary aluminum purchase has a market value of approximately $500 million per year.
Rusal is a subsidiary of London Stock Exchange-listed En+ Group, whose executive chairman is Lord Barker. He will assume the role of co-chairman of the Braidy Atlas mill alongside Braidy Industries chairman and CEO Craig Bouchard.
This strategic partnership aims to create on an end-to-end basis the first low-carbon impact industrial aluminum rolling mill operation in the world. Braidy Atlas mill will be the first North American company to contract Rusal’s premier ALLOW-branded (certified low-carbon) aluminum slabs.
No U.S. domestic smelter delivers low-carbon primary aluminum slabs. Rusal is the sole primary aluminum producer globally that is capable of meeting Braidy’s quantity requirements and sustainability standards. This partnership will enable Braidy to become the first company to use 100% low-carbon inputs on a permanent ongoing basis, according to a press release.
“In 2021, Braidy Atlas will make the largest order for primary aluminum rolling slab worldwide,” Bouchard said. “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, the founder and managing director of HARBOR Aluminum Intelligence, one of the world's leading aluminum industry consultancies, said the deal is a good one for Braidy Industries.
“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,” Vazquez said. “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 said the announcement is the first step in forging a long-term partnership “that will be vital to building this globally unique plant.”
Kevin Parker, an independent non-executive director of Rusal and an expert in sustainability, called the partnership a “game-changer for the aluminum industry in the United States” because of Rusal’s low-carbon aluminum and Braidy’s downstream assets.
According to a recently completed economic impact study, the Braidy Atlas will contribute $2.8 billion to the commonwealth of Kentucky and $1.54 billion to eastern Kentucky by the year 2021. Also, the report said more than 18,000 new jobs will be created as a resulting, amounting to the generation of 31,000 incremental job years for the commonwealth.