Aluminium giant to close plant in Karelia

The world's biggest aluminium company is abandoning its plant in Nadvoitsy, Republic of Karelia. Photo:

More than 800 people will lose their jobs when Rusal closes its Nadvoitsy plant in the Republic of Karelia.

The company, the world’s biggest producer of aluminium, now confirms that it will close the plant located about 200 km north of Petrozavodsk, the regional capital.

As previously reported by BarentsObserver, Rusal in 2012 announced that it will reduce production with as much as 275,000 tons following shrinking international demands and that it will have to close several of its plants.

The Russian government has been informed about the closure of the Nadvoitsy, which will take place over the next two years. In a letter, Deputy Premier Arkady Dvorkovich confirms that the government will assist the company in finding investors interested in opening alternative production at the plant, Vedomosti reports.

Also the Volkhov plant in Leningrad Oblast will be closed.

According to Rusal, the Karelian plant annually loses about $10 million despite discounts in electricity supplies provided by TGK-1, the leading regional power producer.

The aluminium plant is a cornerstone employer in Nadvoitsy, a town with a population of about 8000. The closure of the plant would trigger a serious social and economic situation in the town, which has little alternative employment sources. 

The closure of the Nadvoitsy is another blow to the economy of the northwest Russian republic. As previously reported, the Karelsky Okatysh, the huge plant in Kostomuksha near the border to Finland, will no longer pay taxes to Karelia. The plant, which is owned Severstal, will from 2013 instead pay taxes to neighboring Vologda Oblast, Severstal’s cornerstone region.