Russian Oligarch Hits Aluminum Industry Where It Hurts

Russian Oligarch Hits Aluminum Industry Where It Hurts


New aluminum smelter in the Irkutsk region will be put into operation in the next few months. Its construction seemed to be endless. RUSAL, the world's second largest aluminum company in terms of primary product output attracted a large loan to complete the project

Specifically, it refers to the Taishet aluminum smelter. Its construction started out back in 2008. At that time, the global financial crisis was just beginning. The plans had to be adjusted to the reality, and the construction stopped and then resumed several times. As a result, the commissioning has been delayed by ten years and will most likely take place in July this year.

In early March, RUSAL announced that it had taken a 45 bln ruble ($592.2 mln) loan to finish the construction. VTB and Gazprombank were the lending banks. Part of the loan will also go to partially refinance previous investments in the facility.

"The construction of the Taishet aluminum smelter is one of our priority projects. So far, RUSAL has financed the costs of the project from its own funds. Now, the loans raised will be used to finish the construction works. In accordance with the plan, it will become one of the most technologically advanced facilities in the global industry," said Oleg Mukhamedshin, RUSAL's Director for Strategy and Financial Markets.

The metallurgical industry has been challenged by the COVID-19 pandemic, analysts said. In 2020, despite the widespread lockdown, global demand for aluminum sagged by only 1.7%. It has been recovering since last December. In Russia, production of this metal has moved to Siberia in recent years. This fact is easy to explain. There is cheap electricity over there that comes from hydroelectric plants, including the ones controlled by the Russian oligarch Oleg Deripaska, and the resource of raw materials, such as alumina, will keep the production going for another 100 years.

Taishet is already actively hiring personnel. The number of applicants is so large that the plant's top executives had to limit the office hours, otherwise HR department couldn't handle the workload. All in all, TAAZ will need about 3,000 people in spite of the declared high degree of automation. In addition to locals, the company is hiring experts from other regions. According to the preliminary data, with the new residents and their family members, the population of the city will increase from the number of 30,000 residents by almost a quarter in the near future.

The design annual capacity of the first phase will be 428,500 tonnes of primary aluminum. This is half the output of the Krasnoyarsk aluminum smelter. However, it is roughly on a par with the Irkutsk aluminum smelter operating in the town of Shelekhov.

"The Taishet smelter might give an impetus to the creation of new enterprises in the Angara region. The metal is in demand in the aerospace and automotive industries. Aluminum is also recognized as one of the most energy-efficient and durable building materials available on the market. Therefore, it will enable the company to launch the production of window frames, facing panels and roofing materials," said Igor Kobzev, the governor of the Irkutsk region.

However, not everything is going so smoothly with the commissioning of the plant. Taishet, for example, has faced an acute shortage of Class D drivers in recent months, including for public transport, the press-service of the mayor’s office told This can be easily explained. The plant, a future metallurgical giant, which can pay much more than, for example, a municipal enterprise has attracted all the drivers.

Environmentalists also voice concerns. A large metallurgical facility is always a serious risk for the environment. In addition, the almost completed construction of the Taishet anode factory, which will supply the plant and other RUSAL plants with anodes, is somewhat in the shadow of the Taishet aluminum smelter. In fact, two large industrial enterprises taken together are putting load on the local ecosystem.

Interestingly, at the same time, smelting aluminum using the baked anode technology is considered to be the most eco-friendly option available today. However, the production of anodized anodes is among the most "damaging" options. Chances are it will ultimately negate all the up-to-date features of the Taishet aluminum smelter.

Earlier, the designers had said that the main technological equipment of the designed factory will be supplied from abroad. In doing so, the level of equipment and technological processes will meet the criteria of top-notch industrial production. The most special attention in the project is paid to gas-handling equipment in order to minimize emissions into the atmosphere.

Nevertheless, in 2013, the residents of Taishet and local deputies tried to stop the construction of the factory. They even appealed to Vladimir Putin. However, in the end, the project got all necessary approvals, and the factory near Taishet will be built too. Today all that is left to do for the residents is to believe that the statements of RUSAL's top managers about the project being completely eco-friendly weren't a bluff.

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