Rusal dismisses shareholder's criticism as "Unbashed Populism"

United Co. Rusal PLC, the world's largest aluminum producer, on Tuesday dismissed a key shareholder's criticism of the company's plans to cut annual output by 7% as "unabashed populism."

Sual Partners had called Rusal's plan to cut production by 300,000 metric tons at its less-efficicient smelters this year "premature" and a sign of a "failure in operational management." In a statement, Rusal said it considered Sual's comments "to be unconstructive and without merit."

"The production optimization decision was reached by a majority of votes of Rusal's board, after careful consideration of the current situation faced by the aluminium market. Sual Partners' comments calling the decision 'premature' are baseless and they do not present an alternative solution but merely appear to be an attempt at unabashed populism," the company said.

Many of the smelters that would see cuts are in single-industry cities that would be deeply affected by a drop in production. In 2009, then-prime minister Vladimir Putin had to step in after workers at a facility in Pikalyovo operated by Basic Element, which is owned by Rusal's primary shareholder Oleg Deripaka, 250 kilometers east of St. Petersburg, blocked a highway in protest of the company's decision to idle operations there.

Sual Partners, which is owned by billionaires Viktor Vekselberg and Len Blavatnik, has long been critical of Rusal's curtailment plans. In August, Sual issued a similar statement, attacking Rusal's announcement of cutting production capacity by 275,000 metric tons by 2018.

In March of last year, Mr. Vekselberg abruptly quit as chairman of Rusal's board, accusing management of pushing the heavily indebted company into a deep crisis.