Kandalaksha aluminum plant on Russia's Kola Peninsula. Photo: Thomas Nilsen

Rusal considers closing aluminium factory on Kola peninsula

Suffering weak prices and a global oversupply, the world's top aluminium producer Rusal plans to decide in mid-December which smelters to suspend. 1000 workers in Kandalaksha on the Kola peninsula could lose their jobs.
November 24, 2015

Aluminium producers all over the world are suffering from oversupply and prices that have halved since 2011. Rusal, which is controlled by billionare Oleg Deripaska, has said that it plans to cut up to 200,000 tons of capacity, and is looking at three potential plants.

The plants that are up for consideration for closing in December, are KUBAL (Kubikenborg Aluminium AB) in Sundsvall, Sweden, which has an annual production capacity of 128,000 tons, the Novokuznets smelter in Siberia with a 195,000 tons capacity, and the Kandalaksha smelter on the Kola Peninsula, with an annual capacity of 76,000 tons, Reuters reports.

“A decision will be taken together with the business plan, in December,” General Director Vladislav Solovyov said according to SeverPost.

“The closing process normally takes about half a year.”

“A closing of the smelter in Kandalaksha will mean a hard blow to the whole town,” Head of the local government Mikhail Pavlov says to SeverPost. The smelter employs around 1000 of the 32,000 people in Kandalaksha.  

Rusal has cut production with 800,000 tons over the last three years, and has closed several factories in Russia and aboard. According to the company, production will be resumed when prices reach $2500 per ton. The price right now is less than $1700 per ton – the lowest since the international financial crisis of 2009.