UC Rusal cuts capacity by 300kt

UC Rusal, billed as the world's largest producer of primary aluminium, has announced that it will be cutting production at its less efficient smelters by 300kt by the end of 2013.

The planned cuts, which have now been approved by Rusal's board, are designed to maintain the company’s competitive position in the global marketplace as the current overcapacity, high power tariffs and depressed metal prices kick in.

Rusal claims that the production cuts will not 'deteriorate the social environment and quality of life in these regions', referring to the locations where the cuts will be made. In fact, the company will be addressing 'employment solutions' for all affected workers just as soon as the cuts programme has been ratified by the necessary governmental bodies involved.

All employees working in the affected smelters will be offered alternative employment and that will mean either alternative jobs at their current location, complete retraining within an employment programme, positions at other plants within the Group or the chance to relocate to other regions and work on new greenfield projects currently under construction in Siberia – where there is a high demand for qualified workers.

Oleg Deripaska, CEO of RUSAL, said that the current global situation at the moment means that aluminium producers need to adopt a ration approach in terms of utilising existing capacity and commissioning new plants.

He said that the oversupply crisis was never completed addressed by Rusal and now it is necessary for the company to make these cuts before the year-end.