Rusal to Mothball Part of Russian Raw Materials Output, Vows to Ease Impact on Company Towns
Aluminum producer Rusal has asked the Russian government for support as it prepares to temporarily halt several loss-making raw materials plants. One of the towns affected was the site of major unrest in 2009 that forced Vladimir Putin to personally intervene.
Russian aluminum producer Rusal is preparing to temporarily mothball part of its domestic raw materials production, business daily Kommersant reported, citing a letter the company sent to Prime Minister Mikhail Mishustin.
According to Kommersant, the plan covers the Pikalyovo Alumina Refinery, the Severouralsk Bauxite Mine, and the Bogoslovsk and Ural alumina plants. These enterprises reportedly cost Rusal around $800 million in losses each year, while restoring the raw materials division would require an estimated $1.8 billion in investment.
Company seeks government support
In its letter, Rusal asked authorities to consider support measures for the regions and municipalities that would be affected, pledging to minimize the socioeconomic fallout of the shutdowns. A source in the metals market told Kommersant the central concern is the potential for layoffs in the single-industry towns where the plants are based, naming Krasnoturyinsk, Severouralsk, and Kamensk-Uralsky as particularly at risk.
Echoes of the 2009 Pikalyovo crisis
Pikalyovo, a company town in the Leningrad region, was the site of major social unrest in 2009, when the closure of its three key employers — an alumina plant, a cement plant, and a chemical plant — left residents jobless. They responded by blocking the federal highway linking Novaya Ladoga and Vologda. The unrest was serious enough that then-Prime Minister Vladimir Putin traveled to the town in person, and the State Duma later described the episode as an example of irresponsible corporate conduct. The plants eventually resumed operations.
