MethodologyContact usSupportLogin
The proposed facility is expected to have a yearly production capacity of 500,000 metric tonnes, according to EIH, who cited an estimated project timeline of 3-4 years.
EIH and Rusal have established a joint technical committee to oversee project preparation, with site identification and a feasibility study already in progress, EIH said.
The project’s first-phase cost is estimated to be approximately $1 billion, EIH said.
“The project is designed to meet growing domestic demand, support industrial development and significantly reduce foreign currency outflows currently spent on aluminium imports,” EIH said.
Rusal declined to comment on the MoU.
Questions remain regarding the potential energy supply for the planned smelter, as well as which regional and export markets the potential Ethiopian-produced material would be destined for.
In September 2025, Ethiopia inaugurated the Grand Ethiopian Renaissance Dam (GERD), a hydroelectric project on the River Nile, near the country’s border with South Sudan.
GERD has an estimated energy production capacity of 15,700 gigawatt hours per year, according to the Italian infrastructure group Webuild, which worked on the project.
“I think the proposed smelter would be hydro-powered and considered ‘green’ but it’s tough to say if it would be accepted into Europe,” one trader source said. Another market participant said the smelter could be gas-powered.
While 96% of Ethiopia’s total electricity generation was from hydropower in 2023, according to the International Energy Agency (IEA), the vast majority – around 87% – of the country’s total energy supply came from biofuels and waste in 2023.
“It’s always the question of how feasible the infrastructure will be, with a large part of the country still reliant on non-renewable energy – Rusal would need to secure enough reliable electricity supply to run their smelter in 4-5 years’ time,” Andy Farida, Fastmarkets senior analyst, said.
Following the Russian invasion of Ukraine in February 2022 and continuing conflict, Russia-origin aluminium remains subject to sanctions and trade measures in the EU, which was previously its largest market.
The EU quota on imports of primary aluminium from Russia will be reduced to a maximum of 50,000 tonnes for the period between February 26 2026, and December 31 2026, but only for contracts concluded before February 25 2025.
Currently, a quota of 275,000 tonnes is in place between February 26 2025, and February 25 2026, for Russian primary aluminium imports.
Trade flows of Russian material, including Rusal units, have pivoted to Asia and especially China.
Russia was by far China’s largest supplier of primary aluminium over January-September 2025, accounting for 82.6% of total imports over the period, according to Chinese customs data.
Chinese imports of Russian primary aluminium totaled approximately 1.62 million tonnes over January-September 2025, out of a total of 1.96 million tonnes.
Fastmarkets’ fortnightly assessment of the aluminium P1020A premium, cif Shanghai was $80-100 per tonne on November 18, widening up from $80-95 per tonne two weeks prior.
Want more insights on the aluminium market? Download a free sample of Fastmarkets’ base metals price forecasts to stay ahead of price fluctuations and market conditions.