Russia contemplates building a domestic alumina refinery as imports from China prove to be cost-intensive

Russia is reportedly mulling building an alumina refinery to reduce its dependence on imports from China. As per a document seen by Reuters, China’s alumina exports to Russia have increased since the Russia-Ukraine conflict started.

A draft of the plan for the development of Russia’s metal industry until 2030 has shown that Russia, one of the world’s leading aluminium producers, procures 65 per cent of its required alumina through imports, mostly from China, which as a result, has raised the production costs of aluminium.

In addition, the output halt at Ukraine’s alumina refineries and a ban on Australia’s exports to Russia have also contributed to Russia’s aluminium production cost rise, creating supply disruption of the ore. Rusal said last month that its aluminium production cost soared by 33 per cent in August.

The draft also shows the proposed refinery will be near Russia’s Baltic Sea port of Ust-Luga. But the capacity of the refinery or how it will cost is not estimated yet.

"Investment development projects for the construction of new alumina capacity in Russia are planned," the draft said.

"Critical dependence on imported raw materials for the bulk of the existing production facilities and all prospective projects to increase primary aluminium production capacity is unacceptable," it added.

However, Russia’s industry and trade ministry, which is in charge of the metals sector, has not responded to Reuter’s request.

Rusal, the world’s largest aluminium producer outside China, has also declined to reply to Reuter’s request.