Ethiopia has taken a major step toward expanding its industrial base after a Russian company signed a $1billion agreement to build a 500,000-ton aluminium plant in the country.
- Ethiopia signed a $1 billion agreement with Russian company RUSAL to build a 500,000-ton aluminium plant.
- The project aims to position Ethiopia as a competitive aluminium supplier in regional and global markets.
- The smelter is planned to be constructed over three to four years and expected to operate for up to fifty years.
- Africa’s aluminum production cluster expansion involves a designed facility in Ethiopia to diversify continental output.
Russian aluminium producer RUSAL has taken a decisive step to expand its industrial footprint in Africa after signing a Memorandum of Understanding (MoU) with Ethiopian Investment Holdings (EIH) to develop a large-scale aluminium smelter with a planned annual capacity of 500,000 tonnes.
The first phase of the project carries an estimated cost of about $1 billion, with 70% of the financing expected to come from debt partners who have already signalled strong interest.
Once construction begins, the plant is projected to take three to four years to complete and is expected to operate for up to half a century, providing Ethiopia with long-term industrial and export capacity.
The project aligns with Ethiopia’s broader agenda to reduce heavy foreign-exchange outflows tied to aluminium imports while positioning the country as a competitive supplier to regional and global markets.
Work has already begun on site identification and a comprehensive feasibility study aimed at ensuring that development activities progress on schedule.
RUSAL’s entrance to boost Africa’s production capacity
Africa’s aluminium production remains limited despite vast bauxite reserves, particularly in Guinea, which exports most of its ore for overseas processing.
Smelting capacity is concentrated in a few countries: South Africa’s Hillside smelter produces 720,000 tons annually, Mozambique’s Mozal 580,000 tons, with Egypt’s Egyptalum and Ghana’s VALCO contributing smaller volumes.
Ethiopia’s new project with Rusal could change this dynamic. Planned over three to four years with a potential 50-year lifespan, the smelter would create East Africa’s first major aluminium refining hub, boosting the continent’s production capacity and diversifying its industrial footprint.
The project also strengthens Africa’s role in the global aluminium market, which the International Aluminium Institute expects to grow by 40% by 2030, offering opportunities for downstream industries and regional economic development.
If the project reaches full operational capacity, it could reshape the aluminium value chain in East Africa while deepening Russia’s long-term economic presence in one of Africa’s most strategically positioned markets.
Russia’s expanding industrial push in Africa
The Ethiopian smelter deal reflects Moscow’s growing appetite for strategic economic influence across Africa at a time when Western financing and political engagement have receded.
As global competition for mineral resources intensifies, Russia has accelerated its partnerships in mining, energy and industrial processing – from bauxite and gold concessions in Guinea to nuclear power cooperation agreements with Egypt and potential rare-earth exploration in southern Africa.
This latest investment reveals how Russia, alongside China, is capitalising on weakened Western investment flows and shifting geopolitical alignments to secure long-horizon industrial projects.
With many African governments seeking alternatives to Western conditional financing, Moscow has increasingly positioned itself as a pragmatic partner offering capital, technology and political alignment without governance demands.
