Russia’s mining company plans to halt operations at some plants

Russia’s mining company Rusal has informed the government of plans to temporarily shut down some of its domestic raw-material facilities, Kommersant reports, citing sources.

The report said the facilities in question include the Pikalyovo Alumina Refinery (PGLZ), the Severouralsk Bauxite Mine (SUBR), and the Bogoslovsk and Uralsk plants.

The company estimates that processing raw materials from these facilities costs about $400 more per tonne of aluminium, potentially resulting in combined annual losses of around $800 million. Rusal estimates that $1.8 billion would be needed to restore its domestic raw-material base, Kommersant reports.

During the modernisation period, the company proposes increasing its use of imported bauxite. To facilitate this, Rusal is seeking subsidies for rail transportation and the handling of raw materials at ports, with the total cost of such support estimated at $70 million annually. The company also expects assistance for the regions where the plants slated for mothballing are located.

The Pikalyovo Alumina Refinery had already halted production in 2008–2009, partly due to declining profitability in alumina production and high raw-material costs. The shutdown was followed by the closure of the Pikalyovo Cement and Metakhim plants, which depended on the refinery. Around 4,000 people were left without work in the town, prompting residents to block a federal highway. Then-Prime Minister Vladimir Putin travelled to Pikalyovo, a small town in eastern Leningrad Region, to help resolve the situation.

In 2009, amid the global financial crisis, Rusal also temporarily halted or reduced production at several low-profit facilities, including the Bogoslovsk and Uralsk plants. The Bogoslovsk plant later stopped producing primary aluminium while retaining other production.

By Bakhtiyar Abbasov