Ethiopia has moved to strengthen its industrial base after Russian aluminium giant RUSAL signed a US$1 billion agreement to develop a 500,000-ton aluminium smelter in the country. The deal, reached with Ethiopian Investment Holdings (EIH), marks one of the largest industrial investments in Ethiopia’s recent history and positions the nation to become a major player in the global aluminium market.
The project’s first phase is valued at roughly US$1 billion, with 70% of the financing expected to come from debt partners who have already expressed strong interest. Construction is projected to take between three and four years once work begins, and the facility is designed to operate for up to 50 years.
For Ethiopia, which currently imports most of its aluminium, the smelter could significantly reduce foreign-exchange outflows while creating new export opportunities. Work has already started on identifying a suitable site and conducting a full feasibility study to keep the project on schedule.
RUSAL’s investment is also set to reshape Africa’s aluminium production capacity. Although the continent sits on vast bauxite reserves, particularly in Guinea, it hosts only a handful of smelters. South Africa’s Hillside smelter produces 720,000 tons annually, Mozambique’s Mozal delivers 580,000 tons, while Egypt’s Egyptalum and Ghana’s VALCO contribute smaller volumes. Ethiopia’s planned 500,000-ton facility would introduce East Africa’s first major aluminium hub, diversifying the continent’s output and expanding its industrial capabilities.
Global demand for aluminium is expected to grow by about 40% by 2030, according to the International Aluminium Institute. Ethiopia’s entry into the refining market therefore places it in a strong position to attract downstream industries ranging from automotive assembly to construction materials.
The deal also reflects Russia’s accelerating economic push across Africa. As Western investment flows decline and geopolitical competition intensifies, Moscow has expanded its footprint in mining, energy and industrial processing. From bauxite and gold concessions in Guinea to nuclear projects in Egypt, Russia is increasingly establishing long-term partnerships with African governments seeking alternatives to Western-style conditional financing.
The aluminium project reinforces this trend, tightening Russia’s economic ties with Ethiopia and boosting its presence in a strategically located East African market. If executed successfully, the smelter could reshape the aluminium value chain across Africa and create a lasting industrial corridor linking local production with regional and global demand.
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