Russia’s power company Rushydro would reconsider joining a new aluminium smelter project that Rusal plans to build in Siberia. Rushydro’s head Nikolai Shulginov said on Monday that the deal has been complicated by international sanctions. Rusal started working on the Taishet project in 2006.
The project was stalled in 2009 due to weak aluminium prices. Rusal announced restarting of the smelter last year after the recovery of aluminium prices. In April, Rushydro’s board approved the move to join the project with an investment of around US$1 billion. The project was designed to produce 428,500 tonnes of aluminium annually.
The United States imposed sanctions Rusal and its former president Oleg Deripaska, and the 12 companies they have shares in April.
“The thing is that the situation has been changed,” Shulginov told reporters at a newly launched power station.
He added that the decision to join the project as a partner was taken several months before the sanctions were announced.
Rusal accounted for more than 6 per cent of global aluminium supplies estimated at around 63 million tonnes in 2017. The sanctions caused serious supply concerns among the consumers and associates of Rusal and many countries and companies lobbied to urge the treasury to soften its stance on Rusal.
“Now, taking the sanctions into account, everything has changed. We have to get back, maybe to recalculate our model: what will happen to the aluminium prices, to the electricity prices... There are lots of ‘buts’,” Shulginov concluded.
Russia’s state development bank VEB, one of the financer for Taishet aluminium smelter construction has not suspended the deal yet. Taishet was expected to raise a total of $1 billion in financing, 30 percent of which would be granted by VEB, the organiser of a syndicate of lenders.
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