UC Rusal, the world’s largest aluminium producer, and PhosAgro, a phosphate-based fertilizer producer, recently announced an agreement for the supply of fluoric salts until 2034. The parties have signed a long-term agreement with the aim of further modernizing PhosAgro subsidiary Ammophos in Cherepovets (Vologda Region) and increasing the supply of fluoric salt to Rusal’s plants.

PhosAgro currently supplies 23,000 metric tons (mt) of aluminium fluoride per year to Rusal. In the period 2012-2015, PhosAgro plans to invest RUB 2.2 billion ($30 million) with the aim of increasing production at Ammophos by 12,000 mt/y. Increased production and supplies of fluoric salts to Rusal are planned from the middle of 2015, and are expected to reach 35,000 mt/y in 2016.

Prices will be determined by a formula that includes an investment component. The parties are also considering implementing a similar arrangement at PhosAgro subsidiary Balakovo Mineral Fertilizers in Balakovo (Saratov Region).

The supply agreement with Rusal guarantees PhosAgro long-term sales of fluoric salts, and will allow the company to invest in expanding its production capacities and enhance the environmental security of Ammophos.

“Additional volumes of fluoric salts from PhosAgro will provide security of supply for Rusal and guarantee world-class fluoric salts for the aluminium smelters we are currently building at Boguchansky and Taishet,” said Rusal Commercial Director Pavel Ovchinnikov.

“The agreement not only secures a long-term future for the supply of fluoric salts, but also gives us the ability to invest and expand our production capacities and achieve a guaranteed return on our investment,” said PhosAgro CEO Maxim Volkov. “This agreement will enhance profitability and increase the breadth and depth of uses for components of apatite concentrate, helping us to plan for the future on a long-term basis.”